Series 66 Exam Questions And Accurate
Answers (A+)
3 Criteria that must be met for the Publication to be excluded from the definition of the
Investment Advisers Act of 1940? - ANSWER 1. Must give impersonal advice 2. Must be
"bona fide" not promotional, in good faith 3. General and regular circulation, not market
timing
There are waivers from the Series 65 exam requirement for certain professional
designations. Who qualifies for the waiver? This who are? - ANSWER CFPs, CFA
(chartered financial analyst), CIC (chartered investment counselor), ChFc (chartered
financial consultant) PFS (personal financial specialist)
What would be included in the NW for STATE requirements? - ANSWER NOT intangible
assets like copyrights, patents and NOT home furniture. But tangible assets in your
office would be calculated in sofa in receptionist office
Investment Advisors Act of 1940 requires every firm to have a (CCO) Chief Compliance
Officer. They are responsible for making sure WHO complies with the firms Code of
Ethics ? - ANSWER employees of the firm (reg. or not), any non-employee reg. w/ the
firm
What affect did the NSMIA (National Securities Market Improvement Act) have on
States? - ANSWER IA's reg. w/ one or the other and if reg. w/ the SEC, the States are not
allowed to have requirements that go against what Federal Law states. This regards
capital/custody requirements and record keeping requirements
If fed covered advisor then would be exempt from registering with states just pay filing
fee
When does a BD ever have to register as an Investment Advisor? - ANSWER Usually
,exempt from having to register but would have to if it charges a fee for
advice/management
Those individuals who have no place of business in the state are excluded from State
Registration as an IA if - ANSWER Broker Dealers, Other Investment Advisors,
Institutional investors banks, savings companies, Gov. agencies, etc., clients in state
temporarily, "De Minimis Exemption" = 5 or less clients in the state in past 12 months),
any other exemptions ruled by Administrator
Under the Investment Advisers Act of 1940, which of the following would be EXEMPT
from registration? - ANSWER 1. Advisers performing Intrastate = only clients who live in
same state as principal office and adviser does NOT give advice on securities listed on a
national exchange
2. Advisers whose clients are only insurance companies
3. Advisers whose clients are only venture capital funds
Investment Advisers Act of 1940-What are the record keeping requirements? - ANSWER
Records kept on file for 5 years, (2 yrs. in principals office- easily accessible) and 3yrs
for articles of incorporation/partnership, organizational docs
The sole proprietor of an insurance business that offers advice only on fixed-income
annuity contracts must register with? - ANSWER Fixed income security = Not a security
so Does Not Have To Register With Either. Regulations under USA or IA Act of 1940 only
apply to SECURITIES
What information may an Administrator require from a federal covered adviser? (3
parts) - ANSWER 1. A filing fee
2. A copy of the IA firms Form ADV
3. The Administrator may require an announcement of the application for registration
When does an IA file the consent to service of process form? - ANSWER With the initial
registration and remains on file permanently
,What is a federal covered advisor? Give example - ANSWER 1. Those IA's required to be
registered w/ the SEC/Fed bc of over 110 million in AUM
EX: Manager of an investment company where the company is registered under the IA
Act of 1940
Excluded vs exemption? - ANSWER Excluded from the definition, which means they are
not subject to the state or not subject to the federal law
EITHER ONE COUNTS AS NOT HAVING TO REGISTER
Exemption from registration even though that person is still recognized as an IA; for
example, federal covered adviser is exempt from registering with the state because it is
one or the other.
Adviser that exercises discretion, does not maintain custody but does accept
prepayment of fees in excess of $500 six or more months in advance must maintain
which one of the following net worth? - ANSWER A positive NW at all times
Who must file (NOT Register) with a state Administrator? (representatives) - ANSWER
Investment Adviser Representative (IAR) of a federal covered adviser who has a place
of business in the state. would have to pay the filing fee and file w/ State
IF this has said REGISTER w/ a State Administrator then. even if the IAR did or didn't
have a place of business in the state, the REPRESENTATIVE specifically would not have
to register bc only the IA (Fed Covered advisor) actually REGISTERS
If a pension consulting firm has one office in DC and only one advisory client, namely a
U.S. government employee's pension fund with $4 billion n assets, what do they have to
do for registration? - ANSWER DO NOT think giving advice to just Government securities
so they would be exempt from Fed and would have to Reg. w/ the state
They have one client that is an employee of a gov. pension fund. that does not imply that
ALL of their clients are being advised on GOV securities
, During the Dodd-Frank Act of 2010, once an AUM of a pension consultant reaches 200 m
they have an option between State or SEC registration.
When would Investment Advisors have to register with the North American Securities
Administrators Association NASAA? - ANSWER NEVER IA's never have to register with
the NASAA
Uniform Securities Act (USA) Which of the following is correct regarding out of state
advisers seeking to register with the Administrator of another state not their principal
office? - ANSWER Out of state advisers desiring to register with another states
Administrator, are subject to application of the rules/requirements of the Administrator
of the advisers home state
NOT the Administrator of the State they are desiring to register
When do registered advisers have to register with the state? - ANSWER NEVER they are
exempt from registration they must pay the filing fee if they wish to conduct business
there
Registration under state and federal law is exempt for investment advisers to private
funds. One characteristic of all the private funds is that? - ANSWER They are not
registered as Investment Companies themselves
IAR- Investment Adviser Representative - ANSWER -Partner, officer, director or any
other individual employed by or associated with the IA firm
-Must be a natural person
(includes supervisory people like CEO)
-They-IAR's only register w/ the State
To be considered an IARep, one must meet any one of the 5 criteria? - ANSWER 1.
Answers (A+)
3 Criteria that must be met for the Publication to be excluded from the definition of the
Investment Advisers Act of 1940? - ANSWER 1. Must give impersonal advice 2. Must be
"bona fide" not promotional, in good faith 3. General and regular circulation, not market
timing
There are waivers from the Series 65 exam requirement for certain professional
designations. Who qualifies for the waiver? This who are? - ANSWER CFPs, CFA
(chartered financial analyst), CIC (chartered investment counselor), ChFc (chartered
financial consultant) PFS (personal financial specialist)
What would be included in the NW for STATE requirements? - ANSWER NOT intangible
assets like copyrights, patents and NOT home furniture. But tangible assets in your
office would be calculated in sofa in receptionist office
Investment Advisors Act of 1940 requires every firm to have a (CCO) Chief Compliance
Officer. They are responsible for making sure WHO complies with the firms Code of
Ethics ? - ANSWER employees of the firm (reg. or not), any non-employee reg. w/ the
firm
What affect did the NSMIA (National Securities Market Improvement Act) have on
States? - ANSWER IA's reg. w/ one or the other and if reg. w/ the SEC, the States are not
allowed to have requirements that go against what Federal Law states. This regards
capital/custody requirements and record keeping requirements
If fed covered advisor then would be exempt from registering with states just pay filing
fee
When does a BD ever have to register as an Investment Advisor? - ANSWER Usually
,exempt from having to register but would have to if it charges a fee for
advice/management
Those individuals who have no place of business in the state are excluded from State
Registration as an IA if - ANSWER Broker Dealers, Other Investment Advisors,
Institutional investors banks, savings companies, Gov. agencies, etc., clients in state
temporarily, "De Minimis Exemption" = 5 or less clients in the state in past 12 months),
any other exemptions ruled by Administrator
Under the Investment Advisers Act of 1940, which of the following would be EXEMPT
from registration? - ANSWER 1. Advisers performing Intrastate = only clients who live in
same state as principal office and adviser does NOT give advice on securities listed on a
national exchange
2. Advisers whose clients are only insurance companies
3. Advisers whose clients are only venture capital funds
Investment Advisers Act of 1940-What are the record keeping requirements? - ANSWER
Records kept on file for 5 years, (2 yrs. in principals office- easily accessible) and 3yrs
for articles of incorporation/partnership, organizational docs
The sole proprietor of an insurance business that offers advice only on fixed-income
annuity contracts must register with? - ANSWER Fixed income security = Not a security
so Does Not Have To Register With Either. Regulations under USA or IA Act of 1940 only
apply to SECURITIES
What information may an Administrator require from a federal covered adviser? (3
parts) - ANSWER 1. A filing fee
2. A copy of the IA firms Form ADV
3. The Administrator may require an announcement of the application for registration
When does an IA file the consent to service of process form? - ANSWER With the initial
registration and remains on file permanently
,What is a federal covered advisor? Give example - ANSWER 1. Those IA's required to be
registered w/ the SEC/Fed bc of over 110 million in AUM
EX: Manager of an investment company where the company is registered under the IA
Act of 1940
Excluded vs exemption? - ANSWER Excluded from the definition, which means they are
not subject to the state or not subject to the federal law
EITHER ONE COUNTS AS NOT HAVING TO REGISTER
Exemption from registration even though that person is still recognized as an IA; for
example, federal covered adviser is exempt from registering with the state because it is
one or the other.
Adviser that exercises discretion, does not maintain custody but does accept
prepayment of fees in excess of $500 six or more months in advance must maintain
which one of the following net worth? - ANSWER A positive NW at all times
Who must file (NOT Register) with a state Administrator? (representatives) - ANSWER
Investment Adviser Representative (IAR) of a federal covered adviser who has a place
of business in the state. would have to pay the filing fee and file w/ State
IF this has said REGISTER w/ a State Administrator then. even if the IAR did or didn't
have a place of business in the state, the REPRESENTATIVE specifically would not have
to register bc only the IA (Fed Covered advisor) actually REGISTERS
If a pension consulting firm has one office in DC and only one advisory client, namely a
U.S. government employee's pension fund with $4 billion n assets, what do they have to
do for registration? - ANSWER DO NOT think giving advice to just Government securities
so they would be exempt from Fed and would have to Reg. w/ the state
They have one client that is an employee of a gov. pension fund. that does not imply that
ALL of their clients are being advised on GOV securities
, During the Dodd-Frank Act of 2010, once an AUM of a pension consultant reaches 200 m
they have an option between State or SEC registration.
When would Investment Advisors have to register with the North American Securities
Administrators Association NASAA? - ANSWER NEVER IA's never have to register with
the NASAA
Uniform Securities Act (USA) Which of the following is correct regarding out of state
advisers seeking to register with the Administrator of another state not their principal
office? - ANSWER Out of state advisers desiring to register with another states
Administrator, are subject to application of the rules/requirements of the Administrator
of the advisers home state
NOT the Administrator of the State they are desiring to register
When do registered advisers have to register with the state? - ANSWER NEVER they are
exempt from registration they must pay the filing fee if they wish to conduct business
there
Registration under state and federal law is exempt for investment advisers to private
funds. One characteristic of all the private funds is that? - ANSWER They are not
registered as Investment Companies themselves
IAR- Investment Adviser Representative - ANSWER -Partner, officer, director or any
other individual employed by or associated with the IA firm
-Must be a natural person
(includes supervisory people like CEO)
-They-IAR's only register w/ the State
To be considered an IARep, one must meet any one of the 5 criteria? - ANSWER 1.
