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Series 66 Exam With Complete Solutions Latest Update
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Series 66 Exam With Complete Solutions Latest Update...
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Series 66 Exam With Complete Solutions Latest UpdateAgent Registration - ANSWER You must register as an agent if you are compensated
directly by a commission. You are considered to be an agent and must register as such
if you represent an underwriting fee or commission charging broker-dealer. If you do
not charge a commission and you are effecting exempt transactions and/or transacting
exempt securities, you are not required to register as an agent. However, unless you
represent some sort of government-oriented entity, you usually do need to register. For
example, if you represent a firm that doesn't charge a commission for the sale of a
municipal or federal security, but does receive an underwriting fee, you have to
register.
When does have to register as an investment adviser - ANSWER Under the Dodd-Frank
Bill, investment advisers with less than $100 million in assets under management
register with the states. If the adviser is managing a registered investment company
then the adviser needs to be federal covered. If the individual acts as a pension
consultant with $200 million or more in AUM then the individual may register with the
SEC. An investment adviser who has only advice that pertains to United States
government securities is exempt from the federal definition of an investment adviser
and, thus under the NSMIA as a federal covered adviser.
Securities Act of 1933 Registration Requirements Who must sign the registration
statement when registering securities with the SEC? - ANSWER The signing of the
registration statement by the principal executives of the company involved with money
and a majority of the board of directors attesting to the facts presented as being true to
the best of their knowledge and belief. This would include the chief executive officer,
chief financial officer, and a majority of the board but not the chief operating officer.
Stock splits and registration - ANSWER Shares issued as a result of a stock split need
not be registered because the distribution of additional shares through a stock split or
stock dividend is not within the definition of an offer to sell or a sale as long as no
consideration (payment) is involved.
When can an IA use the term guarantee? - ANSWER The term guaranteed may be used
in respect of principal and interest payments when referring to U.S. government
securities. An adviser cannot guarantee performance and cannot offer to return fees if
that level of performance is not obtained.
,Under USA, when do an agent's registration expire? - ANSWER The registration of
agents, broker-dealers, investment advisers, and investment adviser representatives
under the Uniform Securities Act expire on December 31. Note that the question asks
for the expiration date under the Uniform Securities Act, which is December 31. Do not
be confused by actual practice, which may vary in some states.
An investment adviser has created a charting system and wishes to advertise same in
hopes of gaining new clients. To do this the USA would require: - ANSWER Anytime an
adviser wishes to advertise any sort of charting or graphing system, disclosure must
include the limitations of the system along with a statement relating to the difficulties in
its use.
Nonissuer transaction - ANSWER A nonissuer transaction is one in which the issuer
does not receive the proceeds of the sale. For instance, when a stockholder sells his
shares, he is the one who receives the money, not the issuer. Purchases are never
considered issuer transactions because the money is going out, not coming in. If an
issuer is selling its shares in either a primary or secondary transaction-the latter applies
under the given facts of the donated shares-it is an issuer transaction provided it
receives the proceeds.
Sharon Smith is an agent for Highwater Securities, a broker-dealer registered in all 50
states. Sharon receives an unsolicited order from a bank located in State X, a state in
which she has no place of business. Under the Uniform Securities Act, - ANSWER
Sharon must be registered in State X in order to accept the order.
An agent must be licensed in any state that is the domicile of a client placing an order
unless: The security is exempt The transaction is exempt The agent is representing a
broker-dealer that is exempt from registering in that state. An agent does not have to
register as an agent in each state that the BD is registered. Only those states where the
agent expects clients to reside would the agent have to register. There is no de minimis
exemption for BDs and agents as there is for IAs and IARs.
What is acceptable to use in an advertising campaign? - ANSWER It is not unethical to
advertise free services as a benefit of using a firm, but it is unethical not to deliver
services promised as free. The use of testimonials, guaranteeing future performance,
and also puffing the capabilities of the firm and its employees is all considered
unethical.
, Joint commissions, separate firms. - ANSWER Unless exempted by the Administrator, it
shall be unlawful for any agent to share commissions with anyone who is not also
registered as an agent of or with the same or an affiliated broker-dealer.
What is the difference between an offer and a sale? - ANSWER An offer is made in an
attempt to sell; a sale is the binding contract to sell a security for value. An offer will not
require a principal's approval, but a designated supervisory individual must approve all
sales on the date the order is executed.
Section 402(a) of the Uniform Securities Act contains a long list of securities that are
exempt from the registration and advertising filing requirements of the Act. Included in
that list would be all of the following EXCEPT:
Common stock listed on the NYSE.
Bonds issued by the city of Berlin, Ohio.
Church bonds.
Bonds issued by the city of Berlin, Germany. - ANSWER Bonds issued by the city of
Berlin, Germany.
These include securities issued by a U.S. or Canadian governmental unit and
securities issued by nonprofit and charitable organizations. Exempt securities also
include church bonds. On the other hand, bonds issued by a non-sovereign foreign
government - cities, etc. Even prior to the exemption that the NSMIA created for federal
covered securities, those listed on the NYSE were given what was called the "blue-chip"
exemption.
Registration under SEC - ANSWER Presently, registration with the SEC is mandatory
(and not permissive) for any investment adviser of a registered investment company,
open or closedend. It is permissive for:
pension consultants once their AUM reach $200 million;
small and mid-size advisers who would be required to register in 15 or more states; and
those advisers with at least $100 million in AUM, but not $110 million in AUM
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