Series 65 Unit 1 – Kaplin Questions with Correct
Answers
Is the federal legislation that defines the term investment advisor and
requires persons that fall within the definition to register with the SEC or
with the states in which they do business. 2 primary purposes:
regulation of persons both natural and legal in the business of giving
investment advice
-the establishment of standars of ethical business conduct for the
industry Correct Answer-Investment advisor act of 1940
Under this act investment advisors who are registered wit the SEC under
the Investment advisers act of 1940 *federal covered advisors) do not
register with the state securities administrators Correct Answer-National
Securities Markets Improvement Act of 1993 (NSMIA)
This means any persons engaged in the buesiness of effecting
transactions in securties for the account of others Correct Answer-
Broker
any person regularly engaged in the business of buying and selling
securities as principal for his own account, but doesnt include a bank,
insurance copnay, or investment company Correct Answer-Dealer
a person legally appointed and authorized to hold assets in trust for
another person. They managed the assets for the benefit of the other
person rahter than for his or her own profits must exercise a standard of
,care imposed by law. exampls are an executor of an estate a trustee and
an investment advisor Correct Answer-Fiduciary
means any partner, officer, or director of the investment advisor or
directly or indirectly controllign or controlled by the investment adivor
including any employees of the investment advisor Correct Answer-
Person assosciated with an investment advisor
means any partner, officer, director or employees of an envestment
adviser on behalf of the investment adviser and is subject to the
supervision and control of the ivnestment adviser. includes all
employees even those who perfrom clerical functions and are not
required to become registered. Correct Answer-Supervised Person
the executive office of the investment adviser from which the officers,
partners, or managers of the investment adviser direct, control, and
cooridnate activities o the investment adviser Correct Answer-Principal
office and place of business
is defined as any person who, for compensation, engages in the business
of advising others as to the value of securities or the advisability of
investing in securities or, as part of a regular business, issues analyses or
reports converning scurities Correct Answer-investment adviser
interprets the definition of investment adviser under the IAA act of 1940
to include financial planners, pension consultants, and others who offer
investment advice as part of their financial practices. Correct Answer-
SEC Release IA-1092
, persons who make recs regarding a person's financial resources or
perform analyses that concern securities are investmnet advisers if such
cservices are performed as part of a business and for compensation. SEC
holds that there is no such thing as a comprehensive financial plan that
does not involve securites Correct Answer-Financial Planners
consultants who advise employee benefit plans on how to fund their
plans with securities are also considered investment advisers by the
SEC. Correct Answer-pension consultants
persons who provide financially related servces to entertainers and
athletes that include advice related to investments, tax planning,
budgeting and money management are also investment advisors. *A
sports agen who secures a favorable contract for a football player and
receives a commission of 10% of the player's salary is not necessarily an
investment adviser. However - once they advise the player to invest his
money in specific securities the agent is then in the business of offering
investment advice and would then be subject to the investment advisor
act of 1940 or uniform securities act Correct Answer-Sports and
entertaintment reps
A person who receives any economic benefit as a result of providing
investment advice is an investment adviser. Includes advisory fees,
commissions, or other types of fees relating to the service redered. Can
be payed by a third party but always must be disclosed to the client.
Fees receied from a corporation for advice given to the corporations
emlpyees or retirees are considred compensation Correct Answer-
Compensation
Answers
Is the federal legislation that defines the term investment advisor and
requires persons that fall within the definition to register with the SEC or
with the states in which they do business. 2 primary purposes:
regulation of persons both natural and legal in the business of giving
investment advice
-the establishment of standars of ethical business conduct for the
industry Correct Answer-Investment advisor act of 1940
Under this act investment advisors who are registered wit the SEC under
the Investment advisers act of 1940 *federal covered advisors) do not
register with the state securities administrators Correct Answer-National
Securities Markets Improvement Act of 1993 (NSMIA)
This means any persons engaged in the buesiness of effecting
transactions in securties for the account of others Correct Answer-
Broker
any person regularly engaged in the business of buying and selling
securities as principal for his own account, but doesnt include a bank,
insurance copnay, or investment company Correct Answer-Dealer
a person legally appointed and authorized to hold assets in trust for
another person. They managed the assets for the benefit of the other
person rahter than for his or her own profits must exercise a standard of
,care imposed by law. exampls are an executor of an estate a trustee and
an investment advisor Correct Answer-Fiduciary
means any partner, officer, or director of the investment advisor or
directly or indirectly controllign or controlled by the investment adivor
including any employees of the investment advisor Correct Answer-
Person assosciated with an investment advisor
means any partner, officer, director or employees of an envestment
adviser on behalf of the investment adviser and is subject to the
supervision and control of the ivnestment adviser. includes all
employees even those who perfrom clerical functions and are not
required to become registered. Correct Answer-Supervised Person
the executive office of the investment adviser from which the officers,
partners, or managers of the investment adviser direct, control, and
cooridnate activities o the investment adviser Correct Answer-Principal
office and place of business
is defined as any person who, for compensation, engages in the business
of advising others as to the value of securities or the advisability of
investing in securities or, as part of a regular business, issues analyses or
reports converning scurities Correct Answer-investment adviser
interprets the definition of investment adviser under the IAA act of 1940
to include financial planners, pension consultants, and others who offer
investment advice as part of their financial practices. Correct Answer-
SEC Release IA-1092
, persons who make recs regarding a person's financial resources or
perform analyses that concern securities are investmnet advisers if such
cservices are performed as part of a business and for compensation. SEC
holds that there is no such thing as a comprehensive financial plan that
does not involve securites Correct Answer-Financial Planners
consultants who advise employee benefit plans on how to fund their
plans with securities are also considered investment advisers by the
SEC. Correct Answer-pension consultants
persons who provide financially related servces to entertainers and
athletes that include advice related to investments, tax planning,
budgeting and money management are also investment advisors. *A
sports agen who secures a favorable contract for a football player and
receives a commission of 10% of the player's salary is not necessarily an
investment adviser. However - once they advise the player to invest his
money in specific securities the agent is then in the business of offering
investment advice and would then be subject to the investment advisor
act of 1940 or uniform securities act Correct Answer-Sports and
entertaintment reps
A person who receives any economic benefit as a result of providing
investment advice is an investment adviser. Includes advisory fees,
commissions, or other types of fees relating to the service redered. Can
be payed by a third party but always must be disclosed to the client.
Fees receied from a corporation for advice given to the corporations
emlpyees or retirees are considred compensation Correct Answer-
Compensation
