IACCP MASTER STUDY GUIDE 2026
QUESTIONS WITH SOLUTIONS GRADED A+
⩥ SEC Registration Required when 1) definition of "IA" is met (unless
otherwise excepted from definition or exempt/prohibited from
registration); AND $100M in AUM (optional for Mid-Sized Advisers
AUM $100-115M Buffer Zone) - OR - 2) when ADVISING a
Registered Investment Company - OR - 3) AUM $25-100M AND NOT
registered/required to register with State OR NOT Subject to EXAMS
by State
Registration withdraw required for AUM under $90M. Answer: SEC
Registration Optional when 1) AUM $25-100M (except NY req. at
$25M) - OR - 2) Advisers Registered in 15 or more States
(AUM $25M or less PROHIBITED from registering w/ SEC but held to
various state requirements)
⩥ EXCLUDED from Definition of "IA" are:
1) Domestic banks and bank holding companies; 2) Services SOLELY
Incidental by lawyers, accountants, engineers, teachers, (and) 3) BD
advisory services w/out special compensation; 4) Publishers of bona fide
newspapers/mags w/Regular Circulation; 5) Advising Direct Obligations
of US (bonds); 6) NRSROs (Nationally Recognized Statistical Rating
Orgs; 7) Family Offices; and 8) Others designated by SEC rulemaking
,(such as those otherwise prohibited or exempt). Answer: EXEMPTIONS
from SEC Registration:
1) Intrastate Advisers: NOT advising, analyzing or reporting on NSE
Listed Securities* and ALL Clients reside in same state as principal
office (*includes securities w/ unlisted trading privileges); 2) Advisers to
ONLY Insurance Companies; 3) Private Fund Advisers w/ AUM less
than $150M, and Advisers to Foreign Private and Venture Capital Funds;
4) Church Plans, and certain 5) Charitable organizations 6) Registered
Commodity Trading 7) Small Business Investment Companies
⩥ Private Fund Adviser Exemption Criteria:
PRIVATE FUND: Advise SOLELY private funds (unlimited) so long as
aggregate assets of such NOT EXCEEDING $150M (per ADV annual
calculation), including Non-US Advisers when ALL US clients are
Qualifying Private Funds
VENTURE CAPITAL: Any advising SOLELY venture capital funds
FOREIGN PRIVATE: No place of business in US, Less than 15 private
fund clients/investors in US, Less than $25M aggregate AUM attributed
to clients/private fund investors, AND doesn't hold out to US public as
an IA. Answer: Form PF (intended to Monitor Systematic Risk to US
Financial System) is required by advisers to Hedge & other Private
Funds, and SEC-Registered Advisers to 1 or More Private Funds having
at least $150M AUM attributable to such as of last fiscal year-end
Form PF filing EXEMPTION: Advisers NOT registered/required to
register with SEC
,⩥ Dodd-Frank also resulted in changes to AUM by 1) raising
registration threshold to $100M, and creating Mid-Sized adviser
category w/ AUM $25-100M (w/ $100-115 Buffer Zone); and 2)
"RAUM" Uniform Calculation of Gross Basis at Market Value (or fair
value if n/a) to include: (i) "Securities Portfolios" (any consisting of at
least 50%) and/or Private Funds to which adviser provides
Regular/Continuous Supervisory or Management services; (ii)
Proprietary accounts (owned in aggregate 25% or more), accts managed
w/out compensation and those of foreign clients; and (iii) uncalled
capital commitments to private fund(s). Answer: Repeal of Private
Adviser Exemption (per Dodd-Frank) brought into SEC's regulatory
view hedge, private equity, venture capital, and other private funds by
adding regulation to circumvent adviser's use of a loop-hole to avoid
registration in which each fund, and not it's underlying investors, is
counted as a "client"
⩥ An IAR (supervised person of an Investment Advisor) is required to
be licensed when it has more than 5 and with more than 10% of which
are natural person clients.
EXCEPTIONS: 1) Qualified Clients (person/company that immediately
after entering into contract has at least $1 million AUM by IA or net
worth of $2 million; 2) Irregular communication; 3) Impersonal
Advisory Services are NOT required for consideration when
determining an IARs licensing requirement. Answer: When is IAR
licensing required and what are the exceptions?
, ⩥ Varies by state but generally an SEC-registered IA must notice file in
any state in which it has 5 or more clients (de minimus). Exceptions:
LA, NE, NH & TX. Answer: State Notice Filing is generally required
when
⩥ Investment Advisers are generally required to register in the state
where they have a principal place of business and any states where they
maintain de minimus (5 or more clients in that state with the exception
of LA, NE, NH & TX which have their own de minimus). Answer:
When is State Adviser Registration generally required?
⩥ The following are deemed a SINGLE CLIENT
1) a natural person, and: (i) any minor child; (ii) any relative, spouse, or
relative of spouse having same residence; (iii) all accounts of which the
person is the only primary beneficiary; and (iv) all trusts of the person or
of which the person is the only primary beneficiary;
2) A corporation, general partnership, limited partnership, LLC, trust, or
other legal org receiving advice based on investment objectives rather
than individual objectives of shareholders/partners/etc. INCLUDING
two or more legal orgs having identical owners. Answer: Define client
according to Advisers Act
⩥ recommendations in light of a clients experience, situation and
objectives. Answer: Define suitability
QUESTIONS WITH SOLUTIONS GRADED A+
⩥ SEC Registration Required when 1) definition of "IA" is met (unless
otherwise excepted from definition or exempt/prohibited from
registration); AND $100M in AUM (optional for Mid-Sized Advisers
AUM $100-115M Buffer Zone) - OR - 2) when ADVISING a
Registered Investment Company - OR - 3) AUM $25-100M AND NOT
registered/required to register with State OR NOT Subject to EXAMS
by State
Registration withdraw required for AUM under $90M. Answer: SEC
Registration Optional when 1) AUM $25-100M (except NY req. at
$25M) - OR - 2) Advisers Registered in 15 or more States
(AUM $25M or less PROHIBITED from registering w/ SEC but held to
various state requirements)
⩥ EXCLUDED from Definition of "IA" are:
1) Domestic banks and bank holding companies; 2) Services SOLELY
Incidental by lawyers, accountants, engineers, teachers, (and) 3) BD
advisory services w/out special compensation; 4) Publishers of bona fide
newspapers/mags w/Regular Circulation; 5) Advising Direct Obligations
of US (bonds); 6) NRSROs (Nationally Recognized Statistical Rating
Orgs; 7) Family Offices; and 8) Others designated by SEC rulemaking
,(such as those otherwise prohibited or exempt). Answer: EXEMPTIONS
from SEC Registration:
1) Intrastate Advisers: NOT advising, analyzing or reporting on NSE
Listed Securities* and ALL Clients reside in same state as principal
office (*includes securities w/ unlisted trading privileges); 2) Advisers to
ONLY Insurance Companies; 3) Private Fund Advisers w/ AUM less
than $150M, and Advisers to Foreign Private and Venture Capital Funds;
4) Church Plans, and certain 5) Charitable organizations 6) Registered
Commodity Trading 7) Small Business Investment Companies
⩥ Private Fund Adviser Exemption Criteria:
PRIVATE FUND: Advise SOLELY private funds (unlimited) so long as
aggregate assets of such NOT EXCEEDING $150M (per ADV annual
calculation), including Non-US Advisers when ALL US clients are
Qualifying Private Funds
VENTURE CAPITAL: Any advising SOLELY venture capital funds
FOREIGN PRIVATE: No place of business in US, Less than 15 private
fund clients/investors in US, Less than $25M aggregate AUM attributed
to clients/private fund investors, AND doesn't hold out to US public as
an IA. Answer: Form PF (intended to Monitor Systematic Risk to US
Financial System) is required by advisers to Hedge & other Private
Funds, and SEC-Registered Advisers to 1 or More Private Funds having
at least $150M AUM attributable to such as of last fiscal year-end
Form PF filing EXEMPTION: Advisers NOT registered/required to
register with SEC
,⩥ Dodd-Frank also resulted in changes to AUM by 1) raising
registration threshold to $100M, and creating Mid-Sized adviser
category w/ AUM $25-100M (w/ $100-115 Buffer Zone); and 2)
"RAUM" Uniform Calculation of Gross Basis at Market Value (or fair
value if n/a) to include: (i) "Securities Portfolios" (any consisting of at
least 50%) and/or Private Funds to which adviser provides
Regular/Continuous Supervisory or Management services; (ii)
Proprietary accounts (owned in aggregate 25% or more), accts managed
w/out compensation and those of foreign clients; and (iii) uncalled
capital commitments to private fund(s). Answer: Repeal of Private
Adviser Exemption (per Dodd-Frank) brought into SEC's regulatory
view hedge, private equity, venture capital, and other private funds by
adding regulation to circumvent adviser's use of a loop-hole to avoid
registration in which each fund, and not it's underlying investors, is
counted as a "client"
⩥ An IAR (supervised person of an Investment Advisor) is required to
be licensed when it has more than 5 and with more than 10% of which
are natural person clients.
EXCEPTIONS: 1) Qualified Clients (person/company that immediately
after entering into contract has at least $1 million AUM by IA or net
worth of $2 million; 2) Irregular communication; 3) Impersonal
Advisory Services are NOT required for consideration when
determining an IARs licensing requirement. Answer: When is IAR
licensing required and what are the exceptions?
, ⩥ Varies by state but generally an SEC-registered IA must notice file in
any state in which it has 5 or more clients (de minimus). Exceptions:
LA, NE, NH & TX. Answer: State Notice Filing is generally required
when
⩥ Investment Advisers are generally required to register in the state
where they have a principal place of business and any states where they
maintain de minimus (5 or more clients in that state with the exception
of LA, NE, NH & TX which have their own de minimus). Answer:
When is State Adviser Registration generally required?
⩥ The following are deemed a SINGLE CLIENT
1) a natural person, and: (i) any minor child; (ii) any relative, spouse, or
relative of spouse having same residence; (iii) all accounts of which the
person is the only primary beneficiary; and (iv) all trusts of the person or
of which the person is the only primary beneficiary;
2) A corporation, general partnership, limited partnership, LLC, trust, or
other legal org receiving advice based on investment objectives rather
than individual objectives of shareholders/partners/etc. INCLUDING
two or more legal orgs having identical owners. Answer: Define client
according to Advisers Act
⩥ recommendations in light of a clients experience, situation and
objectives. Answer: Define suitability
