Series 65 - Laws & Regs UPDATED
ACTUAL Exam Questions and CORRECT
Answers
Blue Sky Laws - CORRECT ANSWER - Synonymous for Uniform Securities Act
Conservatorship - CORRECT ANSWER - Type of estate where a court-appointed
guardian takes control of an incapacitated individual's financial, real estate, and other monetary
affairs.
National Securities Market Improvement Act of 1996 (NSMIA) - CORRECT ANSWER -
passed in order to eliminated the dual registration of IAs at both Fed and State level (one or the
other now, never both).
Notice Filing - CORRECT ANSWER - state filing fee that federally registered advisers
may have to pay in the states they conduct business in.
Form ADV Part 1 - CORRECT ANSWER - General info about the adviser (name,
address, type of business organization, any violations in securities regulations, etc.).
Form ADV Part 2 - CORRECT ANSWER - A brochure, written in narrative form in plain
English, which must be delivered to each client. Contains info about business practices, fees, and
possible conflicts of interest.
De Minimis - CORRECT ANSWER - exemption that states if an IA has no more than 5
retail clients in a certain state that they are not required to register.
Form 13F - CORRECT ANSWER - Financial report that shows the market value of
securities held in a portfolio. Advisers that have discretion over equity portfolio with market
values > $100MM are required to file within 45 days of the end of each quarter.
, Exempt Reporting Adviser - CORRECT ANSWER - Advisors that have discretion over
equity portfolios w/ AUM of $100MM (but less than $150MM), are exempt from registration
with the SEC, and yt are still required to file Form 13F.
Federally exempt advisors - CORRECT ANSWER - 1. Private Fund Advisers w/ <
$150MM in AUM
2. Advisers o Hedge Funds w/ < $150MM AUM
3. IA whose only client are insurance companies
4. IA that operates on INTRASTATE basis only, do not provide advice on listed securities and
do not have private fund clients.
5. Foreign private advisers.
Form ADV-W - CORRECT ANSWER - Form that withdraws registration for IAs, IARs,
B/Ds, and agents. Becomes effective 30 days after filing date.
Central Registration Depository (CRD) - CORRECT ANSWER - National database used
by FINRA and NASAA to store info on B/Ds, agents, IAs, and IARs.
Principal - CORRECT ANSWER - B/D effects trades for its own account and is
considered to be acting as a "dealer."
Agency - CORRECT ANSWER - When a B/D effects trades for the accounts of others
and is considered to be acting as a "broker."
Consent to Service of Process - CORRECT ANSWER - form that appoints the state admin
as the registrant's attorney to receive and process any non-criminal legal proceedings. This
appointment is irrevocable.
Security - CORRECT ANSWER - Any investment in an enterprise for profit, w/ a 3rd
party performing the mgmt.
ACTUAL Exam Questions and CORRECT
Answers
Blue Sky Laws - CORRECT ANSWER - Synonymous for Uniform Securities Act
Conservatorship - CORRECT ANSWER - Type of estate where a court-appointed
guardian takes control of an incapacitated individual's financial, real estate, and other monetary
affairs.
National Securities Market Improvement Act of 1996 (NSMIA) - CORRECT ANSWER -
passed in order to eliminated the dual registration of IAs at both Fed and State level (one or the
other now, never both).
Notice Filing - CORRECT ANSWER - state filing fee that federally registered advisers
may have to pay in the states they conduct business in.
Form ADV Part 1 - CORRECT ANSWER - General info about the adviser (name,
address, type of business organization, any violations in securities regulations, etc.).
Form ADV Part 2 - CORRECT ANSWER - A brochure, written in narrative form in plain
English, which must be delivered to each client. Contains info about business practices, fees, and
possible conflicts of interest.
De Minimis - CORRECT ANSWER - exemption that states if an IA has no more than 5
retail clients in a certain state that they are not required to register.
Form 13F - CORRECT ANSWER - Financial report that shows the market value of
securities held in a portfolio. Advisers that have discretion over equity portfolio with market
values > $100MM are required to file within 45 days of the end of each quarter.
, Exempt Reporting Adviser - CORRECT ANSWER - Advisors that have discretion over
equity portfolios w/ AUM of $100MM (but less than $150MM), are exempt from registration
with the SEC, and yt are still required to file Form 13F.
Federally exempt advisors - CORRECT ANSWER - 1. Private Fund Advisers w/ <
$150MM in AUM
2. Advisers o Hedge Funds w/ < $150MM AUM
3. IA whose only client are insurance companies
4. IA that operates on INTRASTATE basis only, do not provide advice on listed securities and
do not have private fund clients.
5. Foreign private advisers.
Form ADV-W - CORRECT ANSWER - Form that withdraws registration for IAs, IARs,
B/Ds, and agents. Becomes effective 30 days after filing date.
Central Registration Depository (CRD) - CORRECT ANSWER - National database used
by FINRA and NASAA to store info on B/Ds, agents, IAs, and IARs.
Principal - CORRECT ANSWER - B/D effects trades for its own account and is
considered to be acting as a "dealer."
Agency - CORRECT ANSWER - When a B/D effects trades for the accounts of others
and is considered to be acting as a "broker."
Consent to Service of Process - CORRECT ANSWER - form that appoints the state admin
as the registrant's attorney to receive and process any non-criminal legal proceedings. This
appointment is irrevocable.
Security - CORRECT ANSWER - Any investment in an enterprise for profit, w/ a 3rd
party performing the mgmt.
