Investment Advisor Brochure - Initial Delivery Requirements correct answers Investment Advisor must deliver Part 2A brochure & any Part 2B supplements to a prospective advisory client not later than entering into the advisory contract. If not delivered at least 48 hours earlier, then the penatly-fr...
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Investment Advisor Brochure - Initial Delivery Requirements correct answers Investment
Advisor must deliver Part 2A brochure & any Part 2B supplements to a prospective advisory
client not later than entering into the advisory contract. If not delivered at least 48 hours earlier,
then the penatly-free termination requirement is in effect (client has right to terminate contract
w/out penalty for 5 business days)
Investment Advisor Brochure - Annual Delivery Requirements correct answers within 120 days
of end of its fiscal year
Form ADV - Frequency of Updates correct answers Annual updating amendment to Form ADV
with the appropriate regulatory body is within 90 days of the advisor's fiscal year
If an agent chooses to appeal an Administrator's order, the agent must file for review of the order
with the appropriate court within how many days? correct answers within 60 days of order entry
Any final order of the Administrator may be appealed within 60 days of the order. The appeal
does not act as a stay of the order. Only a court of competent jurisdiction may issue a stay of the
order. Because the final order is similar to passing sentence, an opportunity for a hearing must be
granted.
Right of Rescission correct answers The right of rescission is the right of the buyer to recover the
purchase price and interest, less income received on the security, resulting from an illegal sale of
securities
When can the Administrator revoke registration? correct answers An Administrator may deny,
revoke, or suspend a registration if it is in the public interest and a registrant failed to include the
fact that he was convicted of a securities-related misdemeanor (or any felony) within the last 10
years. The Administrator may also deny a registration if a registrant has engaged in dishonest or
unethical practices and it is in the public interest to deny the registration. Registration can also be
denied if a registrant violated securities laws of a foreign country.
Marking a prospectus correct answers a prohibited practice because no markings may ever be
made on a prospectus
Price of Rescission Offer correct answers The offer of rescission is based on the price originally
paid for the security, plus interest at a rate determined by the Administrator
can the administrator issue an injunction correct answers Injunctions may be issued by a court of
competent jurisdiction only
When does a State Administrator have jurisdiction over radio/tv broadcasts? correct answers
Radio or TV broadcasts made from outside the state do not come under the Administrator's
jurisdiction
, Injunction correct answers Injunctions are judicial orders that can only be issued by a court of
law, not by an administrative agency such as a state securities Administrator.
De Minimis Exemption correct answers If an adviser has no more than five retail clients who are
residents of the state during the year (previous 12 months), the adviser does not have to register
with the state. This is the de minimis exemption; advisers with no place of business in this state
must register if they have more than five noninstitutional clients in the state.
Under the Uniform Securities Act, registrations of securities professionals expire... correct
answers every December 31, unless renewed.
Federal Covered Securities correct answers A federal covered security has a federally imposed
exemption from state registration. The list includes most securities exempt from registration
under the federal Securities Act of 1933 (those issued by the U.S. government and state and local
governments, as well as bank securities regulated by the Federal Reserve Board). In addition, it
includes a number of securities registered with the SEC, primarily those traded on the exchanges
and Nasdaq, as well as investment companies registered under the Investment Company Act of
1940.
"Offer" as defined in the Uniform Security Act correct answers Under the USA, every attempt to
dispose of OR solicit a purchase or sale in a security for value. Gifts, whether legal or not, are
not considered offers.
Registration by Qualification correct answers A process that allows a security to be sold in a
state. It is available to an issuer who files for the security's registration with the state
Administrator, meets minimum net worth, disclosure, and other requirements, and files
appropriate registration fees. The state registration becomes effective when the Administrator so
orders. NOT registered with the SEC (therefore ineligible for registration by coordination)
Although any issuer may register its securities at the state level by qualification, this
cumbersome means of registration is mainly used in conjunction with intrastate (single-state)
offerings
Registration by Coordination correct answers A process that allows A security to be sold in a
state. It is available to an issuer that files for the security's registration under the Securities Act of
1933 and files duplicates of the registration documents with the state administrator. The state
registration becomes effective at the same time the federal registration statement becomes
effective.
SEC plus state registration (by far most frequently used method for registration)
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.
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