Client Disclosures and Regulations for Broker-Dealers and Investment Advisers

Vocabulary flashcards covering ongoing disclosure requirements, order tickets, promoter regulations, and access person reporting for broker-dealers and investment advisers.

Order Ticket

A record created by an agent for each trade placed, documenting key details such as the customer identifier, account type, security symbol or CUSIP, order type, and whether the order was solicited or discretionary.

Ticker Symbol

A unique set of characters assigned to each publicly traded stock that enables tracking without typing out the full business name.

CUSIP

A unique alphanumeric figure assigned to each security that functions like an identifying number for that security.

Solicited Order

A securities transaction recommended to a customer by a financial firm or its representative.

Form ADV Part 2A

The core brochure document through which an investment adviser discloses its products, services, fees, and firm history to clients.

Form ADV Part 2A Appendix 1

The specialized brochure supplement provided by an investment adviser specifically for wrap fee programs.

Form ADV Part 2B

The brochure supplement detailing information about the investment adviser firm and its individual investment adviser representatives (IARs).

Endorsement

Under NASAA Model Rule 102(a)(4)-1, any statement made by someone other than a current client indicating approval or support of an adviser, or referring/soliciting prospective clients to it.

Promoter

Any person compensated for connecting potential clients with an investment adviser, encompassing both internal employees and third parties (formerly known as a solicitor).

Prospective Client

An individual whom a financial professional aims to sign or onboard as a client.

Ineligible Person

An individual subject to a statutory disqualifying event within the preceding $10$ years, including felony convictions, securities misdemeanors, regulatory bars, or injunctions.

Impersonal Advisory Services

General recommendations and market commentary—such as newsletters—not tailored to any specific client, the solicitation of which exempts a promoter from state IAR registration.

De Minimis Compensation Exemption (SEC)

An SEC rule provision excusing an adviser from executing a written agreement with a promoter if compensation is $1{,}000$ or less (or non-cash equivalent) over the preceding $12$ months.

Access Person

Any supervised person of an investment adviser who has access to non-public client trade data, non-public portfolio holdings of reportable funds, or non-public securities recommendations.

Holdings Report

A mandatory disclosure filed by an access person providing a complete snapshot of personal securities owned, the institutions holding them, and submission dates.

Transaction Report

A mandatory filing submitted by an access person disclosing personal trades no later than $30$ days after the end of each calendar quarter.