USA - Registration / Licensing Flashcards
the Act requires that any ____, ____, _____, and ______ be registered in the state unless there is an exemption
BDs, agents, IAs, or IARs`
NSMIA was enacted to eliminate _______
duplicate fed and state registrations
“Persons” are ______
legal entities
Persons can issue and trade securities, and can be ____ or ____
human or non-human
Persons can be:
- individuals
- corporations
- partnerships
- business trusts
- estates
- trusts
- associations
- joint stock companies or joint ventures
- governments and political subdivisions of governments
- unincorporated organizations and any other legal or commercial entity
The “issuer” for a trust is the person _______
performing the functions of manager of depositor under the trust agreement
The “issuer” for equipment trusts is _______
is the person to whom the equipment is to be leased or conditionally sold (which is the corporation)
For fractional interests in O&G programs, or mining titles or leases, there is no _____
issuer (this makes them have to register through qualification - more stringent to detect fraud)
When an issuer sells or redeems securities, it is termed a _______
issuer transaction
A “non-issuer” is someone who is ______ as an issuer under the act
not defined
In a “non-issuer” transaction, the proceeds from the sale of the securities goes to _____
someone other than the issuer (a secondary transaction)
Firms with no ______ in the state that only deal with ______ are not required to register
with no office in the state than only deal with institutional clients are not required to register
Institutional buyers are:
- banks
- S&Ls
- trust companies
- insurance companies
- investment companies
- pension and profit sharing plans
- anyone else so designated by the state administrator
A broker-dealer is a person who:
- engages in the business of effecting securities transactions for the accounts of others
- engages in the business of trading for his own account
M&A advisors and finders are also considered _____
broker-dealers
Persons that are NOT considered BDs are:
- agents
- depository institutions
- issuers
Firms that trade ______ with ________ with no place of business in the state are exempt
exclusively with professional investors (issuers, other BDs, institutional buyers)
BDs are not required to register in the state where their existing customers are _____
vacationing (30 days or less)
For Canadian BDs with clients visiting the US, they can stay in the US no longer than _____ and must intend to go back to Canada in order for them to not have to register in the US
6 months
An agent is a person who represents a ______ or _____
an issuer or a BD
Is there a requirement saying that you must earn a commission to be considered an agent?
NO
The names of the officers of the company that will act as agents are included on the ______ (Form ____)
included on the BD registration (Form BD)
The only exclusions from the definition of an agent are those representing _____
issuers
The four exclusions for individuals who represent issuers are:
- sales of specified exempt securities (but not all exempt securities)
- exempt transactions
- sales of specified covered securities (but not all covered securities)
- sales of securities to employees of that issuer if no remuneration is paid
The “exempt” securities in regards to an agent of an issuer not having to register in the state are:
- US gov’t
- Foreign gov’t
- Muni gov’t
- Canadian gov’t
- Bank and Savings institutions
- Trust companies
- Promissory notes that will mature in 9 months or less that are rated in top 3 categories in amounts at least of $50,000 (ie commercial paper)
- securities issued in connection with savings, pension, profit sharing plans, and ESOP plans
The “exempt” transactions in regards to an agent of an issuer not having to register in the state are:
- isolated transactions with someone other than the issuer – NOT repeated or successive trades by the same person
- transactions between issuers and underwriters
- transactions with financial or institutional investors
“Covered” securities that exempt an agent of an issuer from registering are:
- federal private placements (Reg D)
- Sales to qualified purchasers (natural persons or family owned companies with at least $5m in investments; pre-existing trusts for the persons listed above as qualified purchasers (but cannot be formed to buy securities); any other person with at least $25m of discretionary investments)
Employees of an _____ who effect trades only for the _____ employees are excluded from registration requirements, as long as no comp is involved
employees of an issuer who effect trades only for the issuer’s employees are excluded
An investment adviser is someone who:
- engages in the business of advising others, directly or indirectly, as to the value of securities, investing, buying/selling securities
- issues or circulates analyses or reports concerning securities on a regular basis
- provides investment advisory services to others in a financial planning context
Persons that are excluded from the definition of investment advisers are:
- IARs
- depository institutions
- professionals
- BDs
- publishers of newsletters that do NOT give advice based on specific investment situations
- federal covered advisers
A federal covered adviser must register with the _____ but not with the state
SEC
If NOT a federal covered adviser, must register with the ____ and not with the SEC
state
Federal investment advisers are those who ________, or adviser to _____
have more than $100m in AUM or are advisers to registered investment companies
A federal covered adviser can choose state or SEC registration if they have between ___ and ___ in AUM
$100 and $110m in AUM
A federal covered adviser does not need to de-register unless its AUM falls beneath _____
$90m
Mid-size advisers that are not required to register in the state must register with the ____
SEC ($25m or more in AUM)
Mid-size advisers with registration in 15 or more states can opt to be ____
SEC-registered
A federal covered adviser is also anyone who is NOT an ______ under the investment adviser act of 1940
NOT defined as an investment adviser
Excluded from the definition of an investment adviser are:
- banks or bank holding companies
- professionals
- BDs and their RRs
- publishers of bona fide newspapers, magazines, or financial publications of a general and regular circulation
- any person who advises solely about US gov’t guaranteed obligations
An IAR is anyone employed by an IA that:
- makes recommendations or renders advice
- managers accounts or portfolios of clients
- determines which recommendations or advice regarding securities should be given
- solicits, offers, or negotiates for the sale of investment advisory services
- supervises employees performing any of these tasks
States still have jurisdiction over IARs who are employed by a _____
federally covered adviser
Agents cannot be affiliated with more than ______ at one time in most states
cannot be affiliated with more than one BD at one time in most states
When an agent begins or terminates employment with a BD or issuer, the agent, as well as the employer, must _____
promptly notify the State administrator