STC SERIES 66 TEST PAPER UPDATED QUESTIONS AND
ANSWERS GRADED A+
✔✔Under the Uniform Securities Act, an individual applying for an investment adviser
representative registration may be required by the Administrator to:
I. Pass an examination
II. Pay a filing fee
III. Maintain a minimum net capital
A) I and II only
B) I and III only
C) II and III only
D) I, II, and III - ✔✔A
✔✔According to the Investment Advisers Act of 1940, when is an investment adviser
required to provide an audited balance sheet to its clients?
A) When the adviser requires the prepayment of a fee that is greater than $500, six
months or more in advance of providing service
B) When the adviser requires the prepayment of a $500 initial advisory fee
C) When the adviser requires the prepayment of a fee that is greater than $1,200, six
months or more in advance of providing service
D) When the adviser has limited discretion over the account - ✔✔C
✔✔An agent who is registered in State A contacts an individual investor in State B. The
investor agrees to open an account and buy a security through the agent. If the broker-
dealer is registered in State B, but the agent is not, the agent MAY:
A) Sell the security if it is registered in State B and the agent's registration is pending in
State B
B) Sell the security as long as the agent's supervising principal is registered in the state
C) Sell the security if it is exempt
D) Not sell the security - ✔✔D
,✔✔If TopJob Advisers has limited discretionary authority over client funds, it is required
to:
A) Prepare a balance sheet and file it with the Administrator
B) Prepare a balance sheet that is audited by an independent CPA and file it with the
Administrator
C) Prepare a balance sheet only if the majority of the firm's clients are qualified pension
plans
D) Prepare an audited balance sheet and provide its books and records to be spot
checked by the Administrator, but only if 72 hours' advance notice is provided - ✔✔A
✔✔If an IA has recently changed the number of partners, but not control of the firm, the
IA registration must be amended within 30 days. Since there is no change in control or
ownership of the firm, a Form ADV-W is not filed. This type of change, however, is
known as succession by:
A) Majority
B) Application
C) Amendment
D) Partners - ✔✔C
✔✔The Uniform Securities Act considers which of the following to be an investment
adviser representative (IAR)?
A) A CPA who gives occasional advice in connection with his tax service, but charges
no additional fees
B) A clerical employee of an advisory firm that has a place of business in the state
C) A CPA with an office in a state who charges a fee for advice that is more than just
incidental to his profession
D) An officer or director of a federal covered adviser who has clients in a state, but has
no office in that state - ✔✔C
✔✔If used by a broker-dealer, which of the following advertisements must be filed with
the Administrator?
,A) An e-mail being sent to potential customers recommending an investment strategy
for corporate bonds
B) A brochure that's used to describe a municipal bond offering
C) An internet-based advertisement soliciting interest in Canadian government bonds
D) A pamphlet created to solicit interest in a private placement being sold under
Regulation D - ✔✔A
✔✔According to the USA, if an investment adviser wants to charge a fee based on the
average value of a client's portfolio, the fee:
A) AIs prohibited unless permitted by the Administrator
B) Is permitted unless prohibited by the Administrator
C) Is always permitted
D) Is always prohibited - ✔✔B
✔✔If an IA or any advisory affiliate pleads nolo contendere to a felony that was
committed in a foreign jurisdiction, this action is:
A) Disclosed to clients on Form ADV Part 1
B) Disclosed to clients on Form ADV Part 2
C) Disclosed to clients on Form ADV-NR
D) Not required to be disclosed since the action occurred in a foreign jurisdiction - ✔✔B
✔✔Every investment advisory contract must be in writing and it must include which of
the following provisions?
A) A statement that assignment of the contract is prohibited
B) A statement that defines the length of time for which the services are contracted
C) A statement that limits the investment adviser's liability to $500,000 per client
D) A statement that fully explains the percentage of the capital gains that will be shared
with the adviser - ✔✔B
, ✔✔An agent located in State W is employed by a broker-dealer that is owned by a
bank. The bank is headquartered in State I. If the agent sells securities issued by the
bank to clients in State I, the agent:
A) Does not need to disclose the affiliation since the clients are located in the state
where the bank is headquartered
B) Does not need to disclose the affiliation since the bank issues exempt securities
C) Would need to disclose the affiliation only if the clients have nondiscretionary
accounts
D) Would need to disclose the affiliation to the customer under any circumstances -
✔✔D
✔✔A soon-to-be-registered agent may take which of the following actions?
I. Accept unsolicited orders
II. Invite prospective clients to seminars
III. Provide research reports to other agents for use with their clients
IV. Cold-call potential clients and provide quotes
A) I and II
B) II and III only
C) I, II, and III only
D) I, II, and IV only - ✔✔B
✔✔An investment adviser is both registered in and located in State A. One of the firm's
IARs has three non-institutional clients and one institutional client in State B. A different
IAR of the firm has four non-institutional clients in State B. If the investment adviser
does NOT have an office in State B, who must register in State B?
A) Only the IARs
B) The IARs and the investment adviser
C) Only the investment adviser
D) Neither the IARs nor the investment adviser - ✔✔C
✔✔According to the Uniform Securities Act, persons providing investment advice are
NOT required to register as investment advisers if the adviser:
ANSWERS GRADED A+
✔✔Under the Uniform Securities Act, an individual applying for an investment adviser
representative registration may be required by the Administrator to:
I. Pass an examination
II. Pay a filing fee
III. Maintain a minimum net capital
A) I and II only
B) I and III only
C) II and III only
D) I, II, and III - ✔✔A
✔✔According to the Investment Advisers Act of 1940, when is an investment adviser
required to provide an audited balance sheet to its clients?
A) When the adviser requires the prepayment of a fee that is greater than $500, six
months or more in advance of providing service
B) When the adviser requires the prepayment of a $500 initial advisory fee
C) When the adviser requires the prepayment of a fee that is greater than $1,200, six
months or more in advance of providing service
D) When the adviser has limited discretion over the account - ✔✔C
✔✔An agent who is registered in State A contacts an individual investor in State B. The
investor agrees to open an account and buy a security through the agent. If the broker-
dealer is registered in State B, but the agent is not, the agent MAY:
A) Sell the security if it is registered in State B and the agent's registration is pending in
State B
B) Sell the security as long as the agent's supervising principal is registered in the state
C) Sell the security if it is exempt
D) Not sell the security - ✔✔D
,✔✔If TopJob Advisers has limited discretionary authority over client funds, it is required
to:
A) Prepare a balance sheet and file it with the Administrator
B) Prepare a balance sheet that is audited by an independent CPA and file it with the
Administrator
C) Prepare a balance sheet only if the majority of the firm's clients are qualified pension
plans
D) Prepare an audited balance sheet and provide its books and records to be spot
checked by the Administrator, but only if 72 hours' advance notice is provided - ✔✔A
✔✔If an IA has recently changed the number of partners, but not control of the firm, the
IA registration must be amended within 30 days. Since there is no change in control or
ownership of the firm, a Form ADV-W is not filed. This type of change, however, is
known as succession by:
A) Majority
B) Application
C) Amendment
D) Partners - ✔✔C
✔✔The Uniform Securities Act considers which of the following to be an investment
adviser representative (IAR)?
A) A CPA who gives occasional advice in connection with his tax service, but charges
no additional fees
B) A clerical employee of an advisory firm that has a place of business in the state
C) A CPA with an office in a state who charges a fee for advice that is more than just
incidental to his profession
D) An officer or director of a federal covered adviser who has clients in a state, but has
no office in that state - ✔✔C
✔✔If used by a broker-dealer, which of the following advertisements must be filed with
the Administrator?
,A) An e-mail being sent to potential customers recommending an investment strategy
for corporate bonds
B) A brochure that's used to describe a municipal bond offering
C) An internet-based advertisement soliciting interest in Canadian government bonds
D) A pamphlet created to solicit interest in a private placement being sold under
Regulation D - ✔✔A
✔✔According to the USA, if an investment adviser wants to charge a fee based on the
average value of a client's portfolio, the fee:
A) AIs prohibited unless permitted by the Administrator
B) Is permitted unless prohibited by the Administrator
C) Is always permitted
D) Is always prohibited - ✔✔B
✔✔If an IA or any advisory affiliate pleads nolo contendere to a felony that was
committed in a foreign jurisdiction, this action is:
A) Disclosed to clients on Form ADV Part 1
B) Disclosed to clients on Form ADV Part 2
C) Disclosed to clients on Form ADV-NR
D) Not required to be disclosed since the action occurred in a foreign jurisdiction - ✔✔B
✔✔Every investment advisory contract must be in writing and it must include which of
the following provisions?
A) A statement that assignment of the contract is prohibited
B) A statement that defines the length of time for which the services are contracted
C) A statement that limits the investment adviser's liability to $500,000 per client
D) A statement that fully explains the percentage of the capital gains that will be shared
with the adviser - ✔✔B
, ✔✔An agent located in State W is employed by a broker-dealer that is owned by a
bank. The bank is headquartered in State I. If the agent sells securities issued by the
bank to clients in State I, the agent:
A) Does not need to disclose the affiliation since the clients are located in the state
where the bank is headquartered
B) Does not need to disclose the affiliation since the bank issues exempt securities
C) Would need to disclose the affiliation only if the clients have nondiscretionary
accounts
D) Would need to disclose the affiliation to the customer under any circumstances -
✔✔D
✔✔A soon-to-be-registered agent may take which of the following actions?
I. Accept unsolicited orders
II. Invite prospective clients to seminars
III. Provide research reports to other agents for use with their clients
IV. Cold-call potential clients and provide quotes
A) I and II
B) II and III only
C) I, II, and III only
D) I, II, and IV only - ✔✔B
✔✔An investment adviser is both registered in and located in State A. One of the firm's
IARs has three non-institutional clients and one institutional client in State B. A different
IAR of the firm has four non-institutional clients in State B. If the investment adviser
does NOT have an office in State B, who must register in State B?
A) Only the IARs
B) The IARs and the investment adviser
C) Only the investment adviser
D) Neither the IARs nor the investment adviser - ✔✔C
✔✔According to the Uniform Securities Act, persons providing investment advice are
NOT required to register as investment advisers if the adviser:
