IACCP (MATERIAL) EXAM QUESTIONS
WITH DETAILED VERIFIED ANSWERS
Which THREE are consistent with Form ADV amendment requirements under the
Investment Advisers Act of 1940? (Choose three.)
A. File amendments to Form ADV Part 1 electronically via the IARD system.
B. Update Form ADV Part 1 annually and file within 90 days of adviser's fiscal year end.
C. Upload Form ADV Part 2 amendments to the SEC via the IARD system.
D. Amend Form ADV Part 1 within three months of a change in control or in executive
officers.
A. * File amendments to Form ADV Part 1 electronically via the IARD system.
B. * Update Form ADV Part 1 annually and file within 90 days of adviser's fiscal year end.
C. * Upload Form ADV Part 2 amendments to the SEC via the IARD system.
Which THREE statements are TRUE regarding an SEC-registered investment adviser's
annual review of its policies and procedures? (Choose three.)
A. The annual review should include a determination of the adequacy of the adviser's
policies and procedures.
B. The annual review should assess the effectiveness of the adviser's policies and
procedures.
C. The annual review must be conducted by the adviser's Chief Compliance Officer.
D. The adviser should keep any records documenting the annual review.
A. * The annual review should include a determination of the adequacy of the adviser's policies
and procedures.
B. * The annual review should assess the effectiveness of the adviser's policies and procedures.
D. * The adviser should keep any records documenting the annual review.
Which activity is NOT a retention requirement of the Books and Records Rule under the
Investment Advisers Act of 1940?
,A. Corporate records must be maintained with the attorney of record.
B. Duplicate copies of any electronic records must be maintained.
C. All records must be maintained for the first two years in an appropriate office of the
adviser. D. All books and records must be maintained and preserved in an easily accessible
place for five years from the end of the fiscal year in which the record was created.
A. * Corporate records must be maintained with the attorney of record.
Which situation would trigger a violation of the SEC Pay-to-Play Rule?
A. A covered associate makes a campaign contribution of $50 to the Comptroller for the
State of New York.
B. A covered associate makes a $500 campaign contribution to an elected official, who has
influence in selecting advisers for a government plan which the covered associate is also
soliciting as an advisory client.
C. An investment adviser directs its counsel to make a campaign contribution of $200 to a
government elected official responsible for selecting investment advisers.
D. An investment advisory firm pays another registered investment adviser to solicit
government clients on its behalf.
B. * A covered associate makes a $500 campaign contribution to an elected official, who has
influence in selecting advisers for a government plan which the covered associate is also
soliciting as an advisory client.
Which TWO examples fall within the SEC's definition of custody under the Investment
Advisers Act of 1940? (Choose two.)
A. An investment adviser inadvertently receives a check drawn by a client made payable to
a third party.
B. An investment adviser forwards securities certificates on behalf of its client via
overnight delivery.
C. An investment adviser acts as sole trustee of a trust in which the advisory client is
beneficiary.
, D. An investment adviser inadvertently receives client funds and returns them to the
sender within 48 hours of receiving them.
B. * An investment adviser forwards securities certificates on behalf of its client via overnight
delivery.
C. * An investment adviser acts as sole trustee of a trust in which the advisory client is
beneficiary.
Which is NOT required when an investment adviser wants to engage in a riskless principal
transaction with a client using an affiliated broker-dealer?
A. Sufficient disclosure to enable the client to give informed consent
B. Approval from the client prior to settlement of the trade.
C. Sufficient Form ADV Part 2 disclosure on principal transactions.
D. All of the above are required.
D. * All of the above are required.
Under the Investment Advisers Act of 1940, an investment adviser is restricted from paying
referral fees exceeding $1,000 to an unaffiliated promoter UNLESS the adviser complies
with which THREE requirements? (Choose three.)
A. The promoter is not subject to statutory disqualification.
B. Any cash fee is paid pursuant to a written agreement.
C. The client must be provided by the adviser or promoter with certain disclosure
statements regarding compensation and conflicts of interest.
D. The promoter discloses in writing to each client all disciplinary history with respect to
activities regulated under the securities laws.
A. * The promoter is not subject to statutory disqualification.
B. * Any cash fee is paid pursuant to a written agreement.
C. * The client must be provided by the adviser or promoter with certain disclosure statements
regarding compensation and conflicts of interest.
Adviser has hired a new Chief Compliance Officer (CCO). CCO immediately begins to
revise Adviser's compliance program. However, four of his proposals are rejected by
WITH DETAILED VERIFIED ANSWERS
Which THREE are consistent with Form ADV amendment requirements under the
Investment Advisers Act of 1940? (Choose three.)
A. File amendments to Form ADV Part 1 electronically via the IARD system.
B. Update Form ADV Part 1 annually and file within 90 days of adviser's fiscal year end.
C. Upload Form ADV Part 2 amendments to the SEC via the IARD system.
D. Amend Form ADV Part 1 within three months of a change in control or in executive
officers.
A. * File amendments to Form ADV Part 1 electronically via the IARD system.
B. * Update Form ADV Part 1 annually and file within 90 days of adviser's fiscal year end.
C. * Upload Form ADV Part 2 amendments to the SEC via the IARD system.
Which THREE statements are TRUE regarding an SEC-registered investment adviser's
annual review of its policies and procedures? (Choose three.)
A. The annual review should include a determination of the adequacy of the adviser's
policies and procedures.
B. The annual review should assess the effectiveness of the adviser's policies and
procedures.
C. The annual review must be conducted by the adviser's Chief Compliance Officer.
D. The adviser should keep any records documenting the annual review.
A. * The annual review should include a determination of the adequacy of the adviser's policies
and procedures.
B. * The annual review should assess the effectiveness of the adviser's policies and procedures.
D. * The adviser should keep any records documenting the annual review.
Which activity is NOT a retention requirement of the Books and Records Rule under the
Investment Advisers Act of 1940?
,A. Corporate records must be maintained with the attorney of record.
B. Duplicate copies of any electronic records must be maintained.
C. All records must be maintained for the first two years in an appropriate office of the
adviser. D. All books and records must be maintained and preserved in an easily accessible
place for five years from the end of the fiscal year in which the record was created.
A. * Corporate records must be maintained with the attorney of record.
Which situation would trigger a violation of the SEC Pay-to-Play Rule?
A. A covered associate makes a campaign contribution of $50 to the Comptroller for the
State of New York.
B. A covered associate makes a $500 campaign contribution to an elected official, who has
influence in selecting advisers for a government plan which the covered associate is also
soliciting as an advisory client.
C. An investment adviser directs its counsel to make a campaign contribution of $200 to a
government elected official responsible for selecting investment advisers.
D. An investment advisory firm pays another registered investment adviser to solicit
government clients on its behalf.
B. * A covered associate makes a $500 campaign contribution to an elected official, who has
influence in selecting advisers for a government plan which the covered associate is also
soliciting as an advisory client.
Which TWO examples fall within the SEC's definition of custody under the Investment
Advisers Act of 1940? (Choose two.)
A. An investment adviser inadvertently receives a check drawn by a client made payable to
a third party.
B. An investment adviser forwards securities certificates on behalf of its client via
overnight delivery.
C. An investment adviser acts as sole trustee of a trust in which the advisory client is
beneficiary.
, D. An investment adviser inadvertently receives client funds and returns them to the
sender within 48 hours of receiving them.
B. * An investment adviser forwards securities certificates on behalf of its client via overnight
delivery.
C. * An investment adviser acts as sole trustee of a trust in which the advisory client is
beneficiary.
Which is NOT required when an investment adviser wants to engage in a riskless principal
transaction with a client using an affiliated broker-dealer?
A. Sufficient disclosure to enable the client to give informed consent
B. Approval from the client prior to settlement of the trade.
C. Sufficient Form ADV Part 2 disclosure on principal transactions.
D. All of the above are required.
D. * All of the above are required.
Under the Investment Advisers Act of 1940, an investment adviser is restricted from paying
referral fees exceeding $1,000 to an unaffiliated promoter UNLESS the adviser complies
with which THREE requirements? (Choose three.)
A. The promoter is not subject to statutory disqualification.
B. Any cash fee is paid pursuant to a written agreement.
C. The client must be provided by the adviser or promoter with certain disclosure
statements regarding compensation and conflicts of interest.
D. The promoter discloses in writing to each client all disciplinary history with respect to
activities regulated under the securities laws.
A. * The promoter is not subject to statutory disqualification.
B. * Any cash fee is paid pursuant to a written agreement.
C. * The client must be provided by the adviser or promoter with certain disclosure statements
regarding compensation and conflicts of interest.
Adviser has hired a new Chief Compliance Officer (CCO). CCO immediately begins to
revise Adviser's compliance program. However, four of his proposals are rejected by
