Series 66 || A+ Graded Already.
Covered Security correct answers A security that is exampt from registration within a state.
Registered rep equals correct answers Agent
Types of Securities on the test: correct answers 1. Stocks
-Voting Trust Certificates
-Treasury stock
-Rights or warrants to purchase stock
2. Bonds
-debentures, notes, commercial paper
-Collateral trust certificates
3. Certificates or deposit for a security (not a bank CD)
4. Investment company issues
5. Variable annuities
6. Interest in profit sharing agreements, oil, has, or mining title or leases
7. Real estate sold subject to a mandatory rental pool and real eslipte limited partnership
8. Options and commodity options
9. Preorganization certificates/subscription agreements
10. Whiskey warehouse receipts.
11. REIT/RELP
The term security does not include: correct answers Insurance contracts( life insurance) or
endowment policies with fixed benefits, fixed annuities, Keogh and IRA plans, commodity
futures, drilling leases, Real Estate
"Person" correct answers A person is any individual/ Entity with Power to Act Seperately
Under Law-an individual, corporation, partnership, government, political subdivision, or any
other legal entity with the power to act seperately under the law
Broker/Dealer correct answers any person engaged in the business of effecting transactions in
securities for the account of others or for its own account
NOT broker/dealers and therefore not required to register as a broker/dealer correct answers
Agents, Issuers, Financial institutions, out-of-state broker/dealers are NOT b/d if their
transactions are excusively with or through:
issuers, banks, institutional investors
If a firm "has an office in the state" correct answers they must be registered
An AGENT is any individual who represents a broker/dealer or an issuer in effecting or
attempting to effect the purchase or sale of securities. Therefore, there are two types of
agents: correct answers Broker/dealer agents (you, registered rep),
Issuer agents
Persons not defined as aganets and thefrefore not required to be registered: correct answers
Any individual who represents an ISSUER i effecting:
Transactions of certain EXEMPT SECURTIES, EXEMPT TRANSACTIONS, Transactions
in FEDERAL COVERED SECURITIES, transactions with customers temporarily in a state
,for 30 days (nonresident vacation exception), customers who are new residents for 60
days(new resident exception).
Two exceptions to the definition of breaker/dealer agent correct answers Nonresident (30
days), New Resident(60 days)
Conditions:
-Not ineligible to register in that state
-Registered with SRO and at least one state
-B/D must be registered in that state
Investment Advisors in a state: correct answers Any persons who have an office in a state and
receive compensation or fees for their financial advice are defined as IA's, engage in the
business of advising others, they publish securities analyses or reports, the call themselves
planners
De Minimis Exemption correct answers The advisor or representative does business with five
or less residents of the state in a 12 month period
Federal Covered Advisors correct answers Investment advisors that have $30 million or more
in assets under management, Investment advisors that advise registered investment
companies, Any advisor that manages a pension plan of $50 million or more, Any advisor to
a nationally recognized statistical ratings organization, like Morningstar or Value line
Investment Advisor Representative (IAR) correct answers any individual employed by or
associated with an individual investment advisor or investment advisory firm. Any partner,
officer, director, associate, or employee who participates in or SUPERVISES advisory
functions
Exempt Security correct answers Can be transacted in a state, or an offer of that security can
be made in a state without that security being registered with that state's administrator. In
addition, the advertisements for that security do not come under the jurisdiction of that state's
administrator. Either security is exampt or transaction is exempt
Assessable Security correct answers A security which may require the holder to pay
additional money to the issuer to continue ownership.Gifting one is a "sale"
Do not consititue either an offer or a sale because they require no payment correct answers
loans, stock dividends, securities acquired through a merger, consolidation, reorganization
Uniforms Securities Act correct answers "Model Law"
State Securities Laws correct answers "Blue Sky Laws"
Issuer for CD, voting- trust certificates or collateral trust: correct answers The dopositor or
manager
If it comes out of the ground: correct answers There is no issuer
Nonissuer transaction correct answers the issuer is NOT receiving the Proceeds of the
Transaction in any of these examples
, NON-EXEMPT correct answers Must be registered with the State Administator
Offer to sell correct answers any attempt to dispose of a security, Interest in a security, for
value
B/D agents correct answers ANY individual who represents a B/D in effecting, or attempting
to effect, purchases or sales of securities. includes anyone, regarless of job title.
B/D vs. Agent correct answers A B/D is a FIRM
An agent is always an Individual who represents a B/D
Exempt from Agent status if: correct answers 1. Transactions in exempt securities
2. Exempt transactions
3. Transactions in Federal Covered Securities
4. Transactions with Employees of the Issuer-not receiving commisions
Not- Agent -Exempt securities: correct answers U.S. gov securities and candian gov
securities
-municipal securities
-shares of stock of financial institutions
-short term debt securitites of less than 9 mos (over 50k and "A" or abovE)
-investment contracts
not- Agent exempt transactions: correct answers If representing an ISSUER:
transactions between issuer and it's underwriters
-transactions in bonds secured by real estate
-offers or sales to institutional investors
-private placesments (10 or less people)
-Offers or sales of preorganization certificates (10 or less people)
Investment Advisor-ABC test correct answers A-Advice
B-Business
C-Compensation
NOT investment advisors correct answers IAR, bank, lawyer," LATE", a B/D or its Agents,
publisher, a federal covered advisor
Solicitors-sometimes defined as IAR correct answers Introduces a client to an investment
advisor. Paid a fee.
1. Client must agree in writing, sign and date a disclosure document for the solicitor
2. The client must acknowledge that Fess will be paid by the advisor to the solicitor
3. Solicitor and the IA must maintain copies of signed agreement
IA vs. IAR correct answers IA:
-usually is the firm, can be an individual
0makes decisions for portfolia
-paid a fee for advice
IAR:
Covered Security correct answers A security that is exampt from registration within a state.
Registered rep equals correct answers Agent
Types of Securities on the test: correct answers 1. Stocks
-Voting Trust Certificates
-Treasury stock
-Rights or warrants to purchase stock
2. Bonds
-debentures, notes, commercial paper
-Collateral trust certificates
3. Certificates or deposit for a security (not a bank CD)
4. Investment company issues
5. Variable annuities
6. Interest in profit sharing agreements, oil, has, or mining title or leases
7. Real estate sold subject to a mandatory rental pool and real eslipte limited partnership
8. Options and commodity options
9. Preorganization certificates/subscription agreements
10. Whiskey warehouse receipts.
11. REIT/RELP
The term security does not include: correct answers Insurance contracts( life insurance) or
endowment policies with fixed benefits, fixed annuities, Keogh and IRA plans, commodity
futures, drilling leases, Real Estate
"Person" correct answers A person is any individual/ Entity with Power to Act Seperately
Under Law-an individual, corporation, partnership, government, political subdivision, or any
other legal entity with the power to act seperately under the law
Broker/Dealer correct answers any person engaged in the business of effecting transactions in
securities for the account of others or for its own account
NOT broker/dealers and therefore not required to register as a broker/dealer correct answers
Agents, Issuers, Financial institutions, out-of-state broker/dealers are NOT b/d if their
transactions are excusively with or through:
issuers, banks, institutional investors
If a firm "has an office in the state" correct answers they must be registered
An AGENT is any individual who represents a broker/dealer or an issuer in effecting or
attempting to effect the purchase or sale of securities. Therefore, there are two types of
agents: correct answers Broker/dealer agents (you, registered rep),
Issuer agents
Persons not defined as aganets and thefrefore not required to be registered: correct answers
Any individual who represents an ISSUER i effecting:
Transactions of certain EXEMPT SECURTIES, EXEMPT TRANSACTIONS, Transactions
in FEDERAL COVERED SECURITIES, transactions with customers temporarily in a state
,for 30 days (nonresident vacation exception), customers who are new residents for 60
days(new resident exception).
Two exceptions to the definition of breaker/dealer agent correct answers Nonresident (30
days), New Resident(60 days)
Conditions:
-Not ineligible to register in that state
-Registered with SRO and at least one state
-B/D must be registered in that state
Investment Advisors in a state: correct answers Any persons who have an office in a state and
receive compensation or fees for their financial advice are defined as IA's, engage in the
business of advising others, they publish securities analyses or reports, the call themselves
planners
De Minimis Exemption correct answers The advisor or representative does business with five
or less residents of the state in a 12 month period
Federal Covered Advisors correct answers Investment advisors that have $30 million or more
in assets under management, Investment advisors that advise registered investment
companies, Any advisor that manages a pension plan of $50 million or more, Any advisor to
a nationally recognized statistical ratings organization, like Morningstar or Value line
Investment Advisor Representative (IAR) correct answers any individual employed by or
associated with an individual investment advisor or investment advisory firm. Any partner,
officer, director, associate, or employee who participates in or SUPERVISES advisory
functions
Exempt Security correct answers Can be transacted in a state, or an offer of that security can
be made in a state without that security being registered with that state's administrator. In
addition, the advertisements for that security do not come under the jurisdiction of that state's
administrator. Either security is exampt or transaction is exempt
Assessable Security correct answers A security which may require the holder to pay
additional money to the issuer to continue ownership.Gifting one is a "sale"
Do not consititue either an offer or a sale because they require no payment correct answers
loans, stock dividends, securities acquired through a merger, consolidation, reorganization
Uniforms Securities Act correct answers "Model Law"
State Securities Laws correct answers "Blue Sky Laws"
Issuer for CD, voting- trust certificates or collateral trust: correct answers The dopositor or
manager
If it comes out of the ground: correct answers There is no issuer
Nonissuer transaction correct answers the issuer is NOT receiving the Proceeds of the
Transaction in any of these examples
, NON-EXEMPT correct answers Must be registered with the State Administator
Offer to sell correct answers any attempt to dispose of a security, Interest in a security, for
value
B/D agents correct answers ANY individual who represents a B/D in effecting, or attempting
to effect, purchases or sales of securities. includes anyone, regarless of job title.
B/D vs. Agent correct answers A B/D is a FIRM
An agent is always an Individual who represents a B/D
Exempt from Agent status if: correct answers 1. Transactions in exempt securities
2. Exempt transactions
3. Transactions in Federal Covered Securities
4. Transactions with Employees of the Issuer-not receiving commisions
Not- Agent -Exempt securities: correct answers U.S. gov securities and candian gov
securities
-municipal securities
-shares of stock of financial institutions
-short term debt securitites of less than 9 mos (over 50k and "A" or abovE)
-investment contracts
not- Agent exempt transactions: correct answers If representing an ISSUER:
transactions between issuer and it's underwriters
-transactions in bonds secured by real estate
-offers or sales to institutional investors
-private placesments (10 or less people)
-Offers or sales of preorganization certificates (10 or less people)
Investment Advisor-ABC test correct answers A-Advice
B-Business
C-Compensation
NOT investment advisors correct answers IAR, bank, lawyer," LATE", a B/D or its Agents,
publisher, a federal covered advisor
Solicitors-sometimes defined as IAR correct answers Introduces a client to an investment
advisor. Paid a fee.
1. Client must agree in writing, sign and date a disclosure document for the solicitor
2. The client must acknowledge that Fess will be paid by the advisor to the solicitor
3. Solicitor and the IA must maintain copies of signed agreement
IA vs. IAR correct answers IA:
-usually is the firm, can be an individual
0makes decisions for portfolia
-paid a fee for advice
IAR:
