Unit 1

Question 1

IA under investment advisor act 1940

Answer 1

advice on securites
part of regular business
gets fee

Question 2

investment consoul

Answer 2

the principal business is giving investment advice

a substantial part of the business is rendering investment supervisory services

Question 3

release IA-1092

Answer 3

financial planners- advice on financial products, or a mixture of that and insurance for a fee

penson cunsultants also included

sports and entertainment reps(manages money)

Question 4

exclusions investment advisor

Answer 4

bank, trust company, savings institutions.
bank owned subsidary would have to
LATE if incidental (unless they charge specific fees)
BDS if no special compensation(wrap fee loses exclusion)
publishers(regular circulation)
persons advising soley on gov securites(1940)
IAR(USA)
Federal covered IA(USA)

cheat

Question 5

exempt from investment advisor

Answer 5

(exempt from sec) clients and office in single state(exempt from sec)(no advise on listed securites) (non of clients are private funds)

only clients are insurance companies(sec only)

( state) no place of business in state and
no more than 5 within 6 months

state(no place of business) and deals only with institutions,BDS or other IAS

no pob snowbird

cheat

Question 6

IA register with state or sec

Answer 6

>110 sec
<100 state
in middle sec or state
110 in 15 or more states(sec)
manage investment co(sec)
expect to reach 100 mill in 120 days

Question 7

buffer rule

Answer 7

20 million.

Question 8

pension consultants

Answer 8

never have to be registered with sec

they can register with sec once they reach 200 mill. IT is optional. they can stay state

Question 9

federal covered advisors and fees

Answer 9

need not register with state but may need to pay filing fees(notice filing)

Question 10

adv part 1 b only for

Answer 10

state-registered advisors

Question 11

annual updating amdenment from adv

Answer 11

90 days of fiscal year

Question 12

prompt amendent adv if

Answer 12

change of location, business, management promptly

Question 13

adv W

Answer 13

effective 30 day state

60th say with sec

Question 14

successor firm

Answer 14

new app filed

no fee if state
might be for sec(not tested)

Question 15

NW requirements state

Answer 15

STATE- Dis only 10k
custoday- 35k

surity bond 35k accepted in leu of Net worth

Question 16

exempt from NW requirements state

Answer 16

direct fee deduction

advising pooled investment vehnicles subject to suprise annual audit

Question 17

IA notice to admin if below net capital

Answer 17

notify admin by end of next business day
file financial report within one business day of notice
include statement of customer accounts

Question 18

requirements of NW of state vs sec

Answer 18

state- requirements of where principal office is

SEC- sec requirements

Question 19

disclosure of financial impairment

Answer 19

if advisor has cust or discre

prepay(500 state)(1200 FED) 6 months in advance

Question 20

recordkeeping requirements under state/federal for IAS

Answer 20

5 years/ 2 principal office

can be on microfish or digital

partnership agreements,articles of incorp, charters and minute books(3 years after termination of enterprise)

supervised persons U-4

Question 21

if an ia files an initial registration…when does fee need to be paid

Answer 21

must be paid in full immediately under the USA

Question 22

ADV 2A includes

Answer 22

fees
policies
types of investments

Question 23

deminimus

Answer 23

no more than 5 clients in the state in 12 month period

Question 24

record keeping requires for IARs and agents

Answer 24

none

Question 25

A consent to service of process required by an Administrator is

Answer 25

an agreement whereby a registrant will be bound by any legal action or subpoena served on the Administrator as if it had been served on the registrant

Question 26

material/nonmaterial changes and adv under 1940 act

Answer 26

The SEC requires prompt amendment of any material information changes on Form ADV (e.g., names, location, control, custody, organization) and also requires nonmaterial amendments within 90 days of the end of the adviser’s fiscal year.