Series 65 : Unit 9

Under certain conditions, the Uniform Securities Act provides that an Administrator may require a minimum net worth standard to be met by an investment adviser. Which of the following would be an allowable asset in the computation of an investment adviser's net worth?

accounts receivable

Under the Uniform Securities Act, an investment adviser is exempt from registration if the person has no place of business in a state and does not direct communication

1. to more than 5 noninstitutional clients

2. to more than 15 noninstitutional clients

3. within 9 consecutive months

4. within 12 consecutive months

I and III

The Uniform Securities Act provides either an exclusion from the definition or an exemption from registration as an investment adviser for certain persons. Which of the following would be required to register?

A CFP® who provides a full range of financial planning to clients on a fee-only basis

An investment adviser with $20 million under management exercises investment discretion over client portfolios. If the firm's accounting manager were to discover that the firm's net worth was only $8,500, what would the USA require the firm to do?

1. Cancel all discretionary powers.

2. Immediately raise an additional $1,500.

3. Send notice to the Administrator before the close of business on the day following discovery.

4. Send a financial report to the Administrator before the close of business on the day following the sending of notice.

III and IV

Which of the following would meet the definition of federal covered adviser?

An investment adviser who is registered with the SEC under the Investment Advisers Act of 1940

In October 1987, the SEC promulgated Release IA-1092, which had the effect of broadening the definition of investment adviser. As a result of the release, which of the following would be included in the definition?

1. Commercial banks offering comprehensive financial planning for their high-net-worth clients

2. Entertainment agents earning a fee for negotiating contracts for their clients and then placing a portion of the client's royalties into investment-grade bonds or large-cap stocks as market conditions dictate

3. Persons who receive a nominal fee for assisting employee benefit plan administrators with selecting investment managers for the plan's assets

4. Lawyers who prepare trust agreements for clients with large securities holdings with a goal of minimizing estate taxes

II and III

Registration with the state as an investment adviser would be required for a person with an office in this state who

manages $13 million in assets for four clients.

Shibboleth Research Associates (SRA) meets the definition of an investment adviser and wishes to register with the Securities and Exchange Commission. Assuming the firm meets the requirements, registration is accomplished by filing

Forms ADV Part 1A and Part 2A.

As defined in the Uniform Securities Act, an investment adviser

is any person who, for compensation, engages in the business of advising others as to the value of securities.

All of the following statements regarding the registration of an investment adviser in a state are true except

the annual renewal process involves payment of the appropriate fees and refiling of the consent to service of process.

The final responsibility for ensuring that investment adviser representatives are adequately supervised is that of

the chief compliance officer.

The USA places a number of recordkeeping requirements on investment advisers. Records required to be kept by all state-registered investment advisers include all of the following except

a record by security showing each client's interest and the location thereof.

Under the Uniform Securities Act, the recordkeeping requirements established by the Administrator for out-of-state investment advisers wishing to register in his state are subject to the limitations of

the requirements set by the Administrator of the adviser's home state.

Under the Uniform Securities Act, a person whose business model is selling reports on a subscription basis concerning specific securities to investors based on their individual objectives will be defined as

an investment adviser.

An agent and a broker-dealer maintain wrap fee accounts for several of their customers. Which of the following registrations is required?

The firm must register as an investment adviser.

An investment adviser with $20 million under management exercises investment discretion over client portfolios. If the firm's accounting manager were to discover that the firm's net worth was only $8,500, what would the USA require the firm to do?

1. Cancel all discretionary powers.

2. Immediately raise an additional $1,500.

3. Send notice to the Administrator before the close of business on the day following discovery.

4. Send a financial report to the Administrator before the close of business on the day following the sending of notice.

III and IV

A state-registered investment adviser organized as a corporation is required to preserve a copy of its articles of incorporation

for three years after the termination of the enterprise.

Under the Investment Advisers Act of 1940, which of the following is included in the definition of an investment adviser?

A lawyer who advertises to the public that he offers comprehensive legal and investment advice to high-net-worth individuals