Can a State Administrator issues an injunction against a broker dealer? correct answers NO. Only the courts can issue an injunction.
Under the Uniform Securities Act, the investment adviser brochure rule requires correct answers a brochure, or summary of material changes, if any, to be delivered...
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Can a State Administrator issues an injunction against a broker dealer? correct answers NO.
Only the courts can issue an injunction.
Under the Uniform Securities Act, the investment adviser brochure rule requires correct answers
a brochure, or summary of material changes, if any, to be delivered to all clients within 120 days
of the end of the adviser's fiscal year.
Is whole life insurance a security? correct answers No. However, any insurance product using the
word variable is a security and selling such requires registration as an agent.
What is "the consent to service of process"? correct answers The consent to service of process is
a legal document entered into by all broker-dealers, whereby the Administrator is given the
power to accept legal papers on behalf of the registrant. It is part of Form BD and is permanent
as long as the firm remains in business. In fact, every registrant—agents, investment advisers,
and their representatives, as well as issuers—are required to file a consent.
Is the gift of assessable stock considered an offer, a sale, or both under the USA? correct answers
The gift of assessable stock (a rarity) is considered both an offer and a sale under the USA
because the recipient could be assessed in the event of company bankruptcy.
Tell me about the issuance of a Stop order by a State Administrator. correct answers The subject
of a stop order must be given the opportunity for a hearing. As long as the stop order is in effect,
the security subject to the order may not be sold to the public or the proscribed activity may not
continue. Stop orders do not require an injunction by a court. The Uniform Securities Act does
not grant the Administrator the authority to issue criminal charges; that is the role of the court
system.
What is the annual renewal date for securities professionals in the United States and what is the
annual renewal date for securities professionals with limited Canadian registration? correct
answers Unlike securities professionals in the United States, where the annual renewal date is
December 31, for those using the limited Canadian registration, it is December 1.
When does the withdrawal from registration actually take place after the BD files for
withdrawal? correct answers 30th day after filing, just like when the BD Registers.
How long after BD withdrawal can the State Administrator bring action against the BD? correct
answers 1 year. In FINRA's world, it's 2 years. This is a common test question.
NASAA has created a Model Rule dealing with the creation of and delivery requirements for an
investment adviser brochure. When must the brochure be delivered to prospective and new
advisory clients? correct answers No later than entering into the advisory contract.
, NASAA has created a Model Rule dealing with the creation of and delivery requirements for an
investment adviser brochure. What is the annual delivery date deadline? correct answers Within
120 days of the end of the adviser's year.
The de-minimis exception for Investment Advisor registration in a state is? correct answers If
customers in that state are limited to a maximum of five individuals over any 12-month period,
the Investment Advisor does not have to register. There is NO DE-MINIMIS RULE for
BROKER DEALERS.
Can investment advisors and their representatives use testimonials to promote their products and
services? correct answers Testimonials are prohibited under any circumstances for investment
advisers (IAs) and their representatives. Agents and broker-dealers are permitted to use
testimonials if they meet FINRA standards.
Does the USA require fingerprint cards for registered individuals? correct answers No, but
FINRA does.
When a broker-dealer offers wrap fee programs, does the exclusion from the definition of an
investment adviser apply? correct answers No, it does not. Any individual soliciting for a wrap
fee program offered by a BD would be considered an investment adviser representative and
would need adequate supervision.
How does the USA define a "place of business"? correct answers The Uniform Securities Act
(USA) defines a place of business as one where the IAR regularly provides investment advisory
services; solicits, meets with, or otherwise communicates with clients; or any other location held
out to the public as a location where the representative will do any of these activities. The
frequency of use is not a factor.
Are fixed annuities securities? correct answers No.
Under the Uniform Securities Act, who automatically becomes registered as an agent when a
broker-dealer's registration becomes effective? correct answers The Uniform Securities Act
provides that when a broker-dealer (or investment adviser) files its application for initial
registration in a state: officers, directors, and partners who are already agents (or IARs) are
automatically registered as agents (or IARs) in the new state.
Tell me about Agency Cross Transactions. correct answers An agency cross transaction is a
transaction in which a person acts as an investment adviser in relation to a transaction in which
the adviser or related person acts as a broker-dealer (BD) for both the advisory client and another
person on the other side of the transaction. An advisory client must provide prior written consent
for an adviser to be able to do agency cross transactions as part of the operating plan. An adviser
must make written disclosure to the advisory client that it will act as BD for, have a potential
conflict of interest with, and may collect commissions from both parties. The adviser may not
recommend the transaction to both parties.
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