Series 66 || A+ Certified Answers.
Who must notify the administrator if an agent of a broker-dealer is terminated correct
answers Agent & Ex employer
If agent withdraws from employment from B-D , withdrawal takes effect correct answers
within 30 days
When B-D becomes effective in State, who is not required to separately register correct
answers Directors of B-D
Which terms defined under USA correct answers Investment Adviser, Investment Adviser
Representative, Broker-Dealer
Investment Adviser (IA) correct answers PM. Manages portfolio for individual investors or
companies charging a mgmt fee. Must be Registered with with SEC per Investment Adviser
Act of 1940 and must be registered in each state they operate.
Investment Adviser Representative (IAR) correct answers Provides advice to client. Partner,
officer, director of an IA
Investment Adviser Solicitor correct answers Solicits clients for IA. Must register with state
as IA or Adviser Representative NOT with SEC
Broker-Dealer (BD) correct answers Any1 effecting transaction for themselves or some1 else.
Excluded, agents, issuers deposit taking institutions.
State blue sky laws provide registration for all the following except correct answers BD,
Agents, IA, Issuers (X). Issuers not reg but the securities are.
Excluded from BD if correct answers 1) Any firm that has NO PLACE of business in State
and does not have clients in State
2) Any firm that deals solely with issuers, BDs, financial institutions
De minimis exemption correct answers Allows one to give investment advice without being
registered as an investment adviser. Exemption available on both the Federal and State level.
There is a Federal de mininis exemption and State de minims exemption
Federal de minimis exemption per Investment Adviser Act of 1940 correct answers IA who
gives advice to max 15 ppl within 12 months is exempt from registration with SEC
State de minimis exemption per SEC correct answers IA who gives advice to max 5 ppl
within 12 months is exempt from registration with State
Agent can only be registered if correct answers 1) if they are affiliated with a BD that is
registered
2) Cannot register on own
3) Must register in state they physically reside and direct securities
,Required to register with ______ if managing more than $100m in Assets correct answers
SEC and NOT the state
Federal Covered Advisor correct answers Must register with SEC if adviser has more than
$100m. Exempt from Federal Register under Investment Company act of 1940 if advice is
giving solely about US Govt Secs.
Federal Covered Advisor Representative correct answers No need to register with SEC. Must
register with State.
Required during Initial Registration as Agent correct answers 1) Consent to Service of
Process
2) Filing Fee
3) Registration Application
NO NEED FOR GOVT ID
Consent to Service of Process correct answers Appoints Administration as person allowed to
accept "service of process" for registration in a lawsuit. So if anyone wants to sue, they sent it
to the Administrator first who then forwards it to registrant. Administrator is authorized to
receive suits on behalf of an agent or BD
Registration Application includes correct answers 1) Business History
2) Conviction record
3) Financial condition
Registration of BD constitutes firms correct answers officers, partners, directors as agents
Investment Adviser Registration Depository (IARD) correct answers Electronic database for
when registering electronically
Initial Filing fees prorated (Y or N) correct answers No
Is there a filing fee when IA buys out another IA firm? correct answers No
Form ADV correct answers Required by IA reg application with SEC. has 2 parts
1) IA name, location, fiscal year of business, form of business, owners of business, names of
officers, # of employees, total AUM, states in which Adviser register. Filing must be updated
annual @ fiscal year end. and also be updated within 30 days
2a) advisory firms business, investment style, fees, conflicts of interest
2b) education and work background of key personnel who make investment decisions or
manage accounts. Must be filed within 90 calendar days of advisers fiscal year end.
Brochure Rule correct answers Require IAs per Investment Advisers Act of 1940 to provide
clients a disclosure doc detailing IAs business, fees, conflicts of interest and education. Can
be obtained from Form ADV 2. Must be delivered to clients at or prior to entering advisory
contract.
Form BD correct answers BD app for both Federal and State reg. U4 is the Federal Securities
Industry App for individuals. U5 is the termination form. U10 used to take exams
,Net Capital requirements for BD must be kept in accordance with provisions of the correct
answers SEC 1934. Can also be set by state @ a level under Federal requirement.
If NW requirement is not met then correct answers Adviser must notify State Admin by close
of business day and file report of Advisers financial condition: trail balance of ledger
accounts, statement of all client funds, securities, assets which aren't segregated, computation
of aggregate amount, # of clients
Surety Bond correct answers Fixed ~$10k Amt posted w/ State as case with BDs, Agents &
IA. Can be seized by state if investors defrauded by any of these persons.Can be used to pay
any legal claims. Can be deposited with cash cash of securities. Administrator can waive
surety head requirement if net capital or net worth exceeds stated dollar amount.
Minimum Net Capital correct answers required for BDs and IA. NOT Agents of BD of IA.
Administrator can require new investment adviser who files reg app in a state to correct
answers 1) Announce opening of advisory firm in local newspaper
2) pass oral/written qualification exam
3) file with administrator any advertising or communication to be disseminated to public
Per NASAA record keeping rules for IA, any advertisement, circular or other communication
correct answers Must be retained if sent to 2+ ppl (for 5yrs). Can recommend purchase/sale
of specific security and if it does not state reasons for recommendation, memo must be
retained indicating reasons for recommendation
Correspondance correct answers Email & Instant Message.
Sales Literature correct answers Group email & Research report. If sent to 25+ ppl it's called
communication
per NASAA rules for State Reg Advisers, transactions must be recorded in customer accounts
no later than correct answers 10 business days following EOQ
Per NASAA, advisers must retain records for no less than correct answers 5 yrs & with first 2
years records kept in principal office of the adviser
Articles of Incorporation correct answers must be retained for life of firm plus additional 3
years
Retention of Customer accounts for BDs under USA correct answers Customer trade
confirms for 3 years
Customer account statements for 6 years
Relationship between Admin and USA correct answers Rules written by admin to interpret
provisions of USA. Rules issued not required to be published as matter of public record.
Statue of Limitations per USA correct answers 10 YRS in US. 5 YRS in Foreign jurisdiction
Statue of Limitations for FILING CLAIMS correct answers 5 years under USA, and 3 years
under Federal
, If BD net capital falls below min requirement for reg in State, the admin has power to correct
answers make proper showing to a court of law to appoint a receiver over the firms assets
If individual disagrees with fairly order of administrator they can make appeal within how
much time correct answers 60 days
USA subjects Agents and BD to correct answers 1) Civil liability: refunding customers
money plus 6% interest
2) Criminal liability and penalties: serious violations such as jail and high penalties
USA criminal violations punishable by correct answers $5k fine p/ offense & 3 YRs in prison
Federal violations punishable by correct answers $10k fine p/ offense & 5 YRs in prison
Non exempt transaction correct answers securities transaction where security involved must
be reg in State and subject to any advertising filling rules of State
Plantiff correct answers person bringing case against other in court of law
Defendant correct answers person accused in court of law. hint: has to defend themselves.
Civili liability correct answers unintended violations of USA. to fix, customer must be made
whole plus any fees.
Civil claims must be made correct answers within 3 years of contract of sale but n later than 2
years of discovery of facts constituting the violation
Rescission correct answers Person who sold securities in state in violation of state law can
offer to rescind the sale to any purchaser. Seller offers to return all monies and customer has
30 days to accept. If not accepted, customer can no longer sue for recovery of monies. Cannot
be used to offset criminal liability
Criminal Liability correct answers Serious intentional violations of USA that can incur
criminal liability and criminal penalties
Administrator has jurisdiction over an offer of securities of advisory services if an offer
correct answers 1) Originates in admins state
2) directed into admins state
3) accepted in admins state
Sale correct answers 1) Contract of sale
2) Disposition of an interest for value
3) Gift of assessable securities
Offer to Sale correct answers 1) Offer of security
2) Offer of an interest in security
3) Solicitation of an offer to buy a security
Blue Sky Laws require correct answers registration of securities offerings in each state
Who must notify the administrator if an agent of a broker-dealer is terminated correct
answers Agent & Ex employer
If agent withdraws from employment from B-D , withdrawal takes effect correct answers
within 30 days
When B-D becomes effective in State, who is not required to separately register correct
answers Directors of B-D
Which terms defined under USA correct answers Investment Adviser, Investment Adviser
Representative, Broker-Dealer
Investment Adviser (IA) correct answers PM. Manages portfolio for individual investors or
companies charging a mgmt fee. Must be Registered with with SEC per Investment Adviser
Act of 1940 and must be registered in each state they operate.
Investment Adviser Representative (IAR) correct answers Provides advice to client. Partner,
officer, director of an IA
Investment Adviser Solicitor correct answers Solicits clients for IA. Must register with state
as IA or Adviser Representative NOT with SEC
Broker-Dealer (BD) correct answers Any1 effecting transaction for themselves or some1 else.
Excluded, agents, issuers deposit taking institutions.
State blue sky laws provide registration for all the following except correct answers BD,
Agents, IA, Issuers (X). Issuers not reg but the securities are.
Excluded from BD if correct answers 1) Any firm that has NO PLACE of business in State
and does not have clients in State
2) Any firm that deals solely with issuers, BDs, financial institutions
De minimis exemption correct answers Allows one to give investment advice without being
registered as an investment adviser. Exemption available on both the Federal and State level.
There is a Federal de mininis exemption and State de minims exemption
Federal de minimis exemption per Investment Adviser Act of 1940 correct answers IA who
gives advice to max 15 ppl within 12 months is exempt from registration with SEC
State de minimis exemption per SEC correct answers IA who gives advice to max 5 ppl
within 12 months is exempt from registration with State
Agent can only be registered if correct answers 1) if they are affiliated with a BD that is
registered
2) Cannot register on own
3) Must register in state they physically reside and direct securities
,Required to register with ______ if managing more than $100m in Assets correct answers
SEC and NOT the state
Federal Covered Advisor correct answers Must register with SEC if adviser has more than
$100m. Exempt from Federal Register under Investment Company act of 1940 if advice is
giving solely about US Govt Secs.
Federal Covered Advisor Representative correct answers No need to register with SEC. Must
register with State.
Required during Initial Registration as Agent correct answers 1) Consent to Service of
Process
2) Filing Fee
3) Registration Application
NO NEED FOR GOVT ID
Consent to Service of Process correct answers Appoints Administration as person allowed to
accept "service of process" for registration in a lawsuit. So if anyone wants to sue, they sent it
to the Administrator first who then forwards it to registrant. Administrator is authorized to
receive suits on behalf of an agent or BD
Registration Application includes correct answers 1) Business History
2) Conviction record
3) Financial condition
Registration of BD constitutes firms correct answers officers, partners, directors as agents
Investment Adviser Registration Depository (IARD) correct answers Electronic database for
when registering electronically
Initial Filing fees prorated (Y or N) correct answers No
Is there a filing fee when IA buys out another IA firm? correct answers No
Form ADV correct answers Required by IA reg application with SEC. has 2 parts
1) IA name, location, fiscal year of business, form of business, owners of business, names of
officers, # of employees, total AUM, states in which Adviser register. Filing must be updated
annual @ fiscal year end. and also be updated within 30 days
2a) advisory firms business, investment style, fees, conflicts of interest
2b) education and work background of key personnel who make investment decisions or
manage accounts. Must be filed within 90 calendar days of advisers fiscal year end.
Brochure Rule correct answers Require IAs per Investment Advisers Act of 1940 to provide
clients a disclosure doc detailing IAs business, fees, conflicts of interest and education. Can
be obtained from Form ADV 2. Must be delivered to clients at or prior to entering advisory
contract.
Form BD correct answers BD app for both Federal and State reg. U4 is the Federal Securities
Industry App for individuals. U5 is the termination form. U10 used to take exams
,Net Capital requirements for BD must be kept in accordance with provisions of the correct
answers SEC 1934. Can also be set by state @ a level under Federal requirement.
If NW requirement is not met then correct answers Adviser must notify State Admin by close
of business day and file report of Advisers financial condition: trail balance of ledger
accounts, statement of all client funds, securities, assets which aren't segregated, computation
of aggregate amount, # of clients
Surety Bond correct answers Fixed ~$10k Amt posted w/ State as case with BDs, Agents &
IA. Can be seized by state if investors defrauded by any of these persons.Can be used to pay
any legal claims. Can be deposited with cash cash of securities. Administrator can waive
surety head requirement if net capital or net worth exceeds stated dollar amount.
Minimum Net Capital correct answers required for BDs and IA. NOT Agents of BD of IA.
Administrator can require new investment adviser who files reg app in a state to correct
answers 1) Announce opening of advisory firm in local newspaper
2) pass oral/written qualification exam
3) file with administrator any advertising or communication to be disseminated to public
Per NASAA record keeping rules for IA, any advertisement, circular or other communication
correct answers Must be retained if sent to 2+ ppl (for 5yrs). Can recommend purchase/sale
of specific security and if it does not state reasons for recommendation, memo must be
retained indicating reasons for recommendation
Correspondance correct answers Email & Instant Message.
Sales Literature correct answers Group email & Research report. If sent to 25+ ppl it's called
communication
per NASAA rules for State Reg Advisers, transactions must be recorded in customer accounts
no later than correct answers 10 business days following EOQ
Per NASAA, advisers must retain records for no less than correct answers 5 yrs & with first 2
years records kept in principal office of the adviser
Articles of Incorporation correct answers must be retained for life of firm plus additional 3
years
Retention of Customer accounts for BDs under USA correct answers Customer trade
confirms for 3 years
Customer account statements for 6 years
Relationship between Admin and USA correct answers Rules written by admin to interpret
provisions of USA. Rules issued not required to be published as matter of public record.
Statue of Limitations per USA correct answers 10 YRS in US. 5 YRS in Foreign jurisdiction
Statue of Limitations for FILING CLAIMS correct answers 5 years under USA, and 3 years
under Federal
, If BD net capital falls below min requirement for reg in State, the admin has power to correct
answers make proper showing to a court of law to appoint a receiver over the firms assets
If individual disagrees with fairly order of administrator they can make appeal within how
much time correct answers 60 days
USA subjects Agents and BD to correct answers 1) Civil liability: refunding customers
money plus 6% interest
2) Criminal liability and penalties: serious violations such as jail and high penalties
USA criminal violations punishable by correct answers $5k fine p/ offense & 3 YRs in prison
Federal violations punishable by correct answers $10k fine p/ offense & 5 YRs in prison
Non exempt transaction correct answers securities transaction where security involved must
be reg in State and subject to any advertising filling rules of State
Plantiff correct answers person bringing case against other in court of law
Defendant correct answers person accused in court of law. hint: has to defend themselves.
Civili liability correct answers unintended violations of USA. to fix, customer must be made
whole plus any fees.
Civil claims must be made correct answers within 3 years of contract of sale but n later than 2
years of discovery of facts constituting the violation
Rescission correct answers Person who sold securities in state in violation of state law can
offer to rescind the sale to any purchaser. Seller offers to return all monies and customer has
30 days to accept. If not accepted, customer can no longer sue for recovery of monies. Cannot
be used to offset criminal liability
Criminal Liability correct answers Serious intentional violations of USA that can incur
criminal liability and criminal penalties
Administrator has jurisdiction over an offer of securities of advisory services if an offer
correct answers 1) Originates in admins state
2) directed into admins state
3) accepted in admins state
Sale correct answers 1) Contract of sale
2) Disposition of an interest for value
3) Gift of assessable securities
Offer to Sale correct answers 1) Offer of security
2) Offer of an interest in security
3) Solicitation of an offer to buy a security
Blue Sky Laws require correct answers registration of securities offerings in each state
