Series 65 Unit 1 || with Errorless Solutions 100%.
A famous tennis player offers to record a testimonial for an investment adviser for use in a
television commercial. Under the Uniform Securities Act, the investment adviser may correct
answers not use the testimonial
Under the Uniform Securities Act, which of the following statements is (are) TRUE regarding
registration of broker-dealers and agents? correct answers Those defined as broker-dealers must
be registered with the state before transacting any securities business.
An agent of a broker-dealer must become registered with the state before transacting business.
Joan, who has a PhD in economics, has been employed as an agent by Gibraltar Securities for the
past 15 years. Missing academic life, she resigns from the broker-dealer and accepts a position as
an economics professor at a state university. Which, if any party, is required to notify the state
securities Administrator of this change? correct answers Both Joan and the firm
A customer suspiciously makes deposits totaling $12,000 in 4 installments of $3,000 each. This
attempt to circumvent the currency reporting rules is known as correct answers structuring.
Under state law, all of the following investment advisers are exempt from registration except
correct answers advisers whose only clients are insurance companies.
Which of the following is considered a sale of securities under the Uniform Securities Act?
correct answers Redemption of mutual fund shares is always treated as a sale by the redeeming
shareholder. The exchange of securities in a merger is not considered a sale under the act. Any
disposition (liquidation) of securities that involves cash consideration, or in which the
shareholder has a choice of cash or securities, is a sale.
Under the Uniform Securities Act, the Administrator may require a broker-dealer to post a surety
bond of correct answers Unlike investment advisers where the USA specifies posting a surety
bond in the amount of $35,000, the Uniform Securities Act does not specify an amount for
broker-dealers. However, the NSMIA states that the Administrator may not require a broker-
dealer be bonded in an amount above that set by the SEC. Furthermore, bonds will not be
required of broker-dealers that maintain a specified net capital.
An investment adviser must meet the net worth requirements of the Administrator. When doing
the computation, which of the following assets would be included? correct answers For purposes
of this Rule, the term "net worth" means an excess of assets over liabilities. But net worth does
not include the following as assets: goodwill, franchise rights, patents, copyrights, marketing
rights, and all other assets of intangible nature; home, home furnishings, automobile(s), and any
other personal items not readily marketable in the case of an individual; advances or loans to
stockholders and officers in the case of a corporation; and advances or loans to partners in the
case of a partnership. So, what's the deal with the sofa? Because the choice specifically says that
it is in the reception area, we must assume that it is not a "home" furnishing, rather one in the
office and those are not excluded assets.
, Advisers that manage $110 million or more in customer assets are required to do which of the
following? correct answers Advisers that manage $110 million or more in customer assets are
federal covered advisers and are required to register with the SEC under the Investment Advisers
Act of 1940. In addition, they are normally required to file notice in each state where they
conduct business. There are no bonding requirements for federal covered advisers.
A federal covered investment adviser has which of the following obligations regarding the state
in which it maintains its principal place of business? correct answers A federal covered
investment adviser is required to notify the Administrator of its federal covered status and pay
any state-required fees. The state may require examinations, such as the Series 65 or 66, but not a
net worth in excess of that required under federal law.
Under the Investment Advisers Act of 1940, which of the following statements regarding an
adviser's registration is TRUE? correct answers Under the Investment Advisers Act of 1940,
registrations become effective 45 days after filing, unless delayed by the SEC, and remain
effective until withdrawn by the adviser or canceled, suspended, or revoked by the SEC. The
SEC will cancel a registration if the adviser is no longer in existence or in the business. Although
the ADV-W is the form for withdrawal, it becomes effective upon acceptance by the IARD,
provided however that the investment adviser's registration continues for a period of 60 days
after acceptance solely for the purpose of commencing a proceeding regarding any violation of
the Act.
Which of the following is not included in the definition of broker-dealer as found in the Uniform
Securities Act? correct answers In the Uniform Securities Act, it specifically states: "Broker-
dealer" means any person engaged in the business of effecting transactions in securities for the
account of others or for his own account. "Broker-dealer" does not include (1) an agent, (2) an
issuer, (3) a bank, savings institution, or trust company. Attorneys are excluded from the
definition of investment adviser, as long as their advice is incidental to their legal practice, but
that exclusion does not apply to the term "broker-dealer". Even though credit unions engage in
banking activity, they are not included in the exclusion. Being an investment adviser does not
exclude a person from the need to register as a broker-dealer if that person is performing the
functions of a BD.
USATrade Securities, a FINRA member broker-dealer, is registered in 10 Midwest states.
Regarding financial requirements, USATrade must meet those of correct answers It may be
assumed that a broker-dealer member of FINRA is also registered with the SEC. As such, when
it comes to financial requirements, bonding, recordkeeping, and so forth, the SEC's requirements
always trump those of the states.
Included in the Investment Advisers Act of 1940 are a number of different recordkeeping
requirements. Wealth Preservation Specialists is a covered adviser that is organized as a
partnership. If the firm were to dissolve, partnership agreements must be kept for correct answers
Both the Investment Company Act of 1940 (applicable here because this is a covered adviser)
and the NASAA Model Rule on Recordkeeping require that investment advisers maintain certain
