IACCP WEEK 1 EXAM QUESTIONS WITH
DETAILED VERIFIED ANSWERS
4 elements of "investment advice"
1. Advice about market trends
2. Advice in historical or data form
3. Advice about selecting an adviser
4. Advice about the pros and cons of securities vs. other investments
What is the RAUM threshold for Registered Advisers?
$150 million
What is the RAUM range of a "Mid Sized adviser"?
$25-100 million
What two factors determine whether mid size advisers are required to register?
1. Mid size advisers have to register if the state where their principal office is located does NOT
require registration.
2. If they are registered in a state that is NOT subject to a Exam by the State securities
administrator.
Define small adviser
Advisers with $25 million or less in assets under management
3 reasons for small advisers to register with SEC
1. principal state does not require registration
2. state does not require any type of exam
IARD Account
All states that require registration of IAR's (RA's on CRD) which can be done in a IARD account
When is the deadline to amend form ADV?
, All firms that are registered with the SEC on Jan 1st 2012 must amend their ADV by March
30th, 2012
"buffer zone" to remain SEC registered
If a firm has assets between $90 - $110 million, then the firm is not required to switch their
registration
New rule on "private adviser exemption"
an adviser with its principal office and place of business in the U.S. is exempt from Advisers Act
registration under the Private Fund Adviser
Exemption if it: (1) acts solely as an adviser to one or more "Qualifying Private Funds" and (2)
manages private fund assets of less than $150 million
Foreign Private Adviser Exemption
Under Dodd-Frank Act, adviser will be exempt if:
1. has no place of biz in the U.S.;
2. has fewer than 15 clients and "investors" in the U.S. in "private funds" advised by the adviser;
3. has aggregate assets under management attributable to clients "in the US" of less than $25
million;
4. does not hold itself out generally to the public in the US as an investment adviser.
definition of RAUM
R.egulatory A.ssets U.nder M.anagement - under Advisers Act Section 203A(a)(2) this is when
the advisor is providing continuous and regular supervisory or mamagement services
2 definitions met for RAUM
(a) it has discretionary authority over and
provides ongoing supervisory or management services with respect to the account;
or (b) does NOT have discretionary authority over the account, but has ongoing responsibility to
select or make recommendations, based upon the needs of the client, as to specific securities or
DETAILED VERIFIED ANSWERS
4 elements of "investment advice"
1. Advice about market trends
2. Advice in historical or data form
3. Advice about selecting an adviser
4. Advice about the pros and cons of securities vs. other investments
What is the RAUM threshold for Registered Advisers?
$150 million
What is the RAUM range of a "Mid Sized adviser"?
$25-100 million
What two factors determine whether mid size advisers are required to register?
1. Mid size advisers have to register if the state where their principal office is located does NOT
require registration.
2. If they are registered in a state that is NOT subject to a Exam by the State securities
administrator.
Define small adviser
Advisers with $25 million or less in assets under management
3 reasons for small advisers to register with SEC
1. principal state does not require registration
2. state does not require any type of exam
IARD Account
All states that require registration of IAR's (RA's on CRD) which can be done in a IARD account
When is the deadline to amend form ADV?
, All firms that are registered with the SEC on Jan 1st 2012 must amend their ADV by March
30th, 2012
"buffer zone" to remain SEC registered
If a firm has assets between $90 - $110 million, then the firm is not required to switch their
registration
New rule on "private adviser exemption"
an adviser with its principal office and place of business in the U.S. is exempt from Advisers Act
registration under the Private Fund Adviser
Exemption if it: (1) acts solely as an adviser to one or more "Qualifying Private Funds" and (2)
manages private fund assets of less than $150 million
Foreign Private Adviser Exemption
Under Dodd-Frank Act, adviser will be exempt if:
1. has no place of biz in the U.S.;
2. has fewer than 15 clients and "investors" in the U.S. in "private funds" advised by the adviser;
3. has aggregate assets under management attributable to clients "in the US" of less than $25
million;
4. does not hold itself out generally to the public in the US as an investment adviser.
definition of RAUM
R.egulatory A.ssets U.nder M.anagement - under Advisers Act Section 203A(a)(2) this is when
the advisor is providing continuous and regular supervisory or mamagement services
2 definitions met for RAUM
(a) it has discretionary authority over and
provides ongoing supervisory or management services with respect to the account;
or (b) does NOT have discretionary authority over the account, but has ongoing responsibility to
select or make recommendations, based upon the needs of the client, as to specific securities or
