Under the Uniform Securities Act, which of the following is true in the registration process of a broker-dealer, agent and investment advisor?
Answer(s): C
Under the Uniform Securities Act, the state administrator may ask the broker-dealer, agent or investment advisor to post a bond if he or she is in the practice of taking custody of client funds or exercising discretionary authority over client securities or funds. The amount of the bond is determined by the administrator. Bonds are neither required of broker-dealers whose net capital exceeds specified minimum amounts, nor of investment advisors whose financial requirements meet specified amounts; these amounts are also determined by the administrator
The Uniform Securities Act describes:
The Uniform Securities Act is a model law created to establish guidelines for states as they govern investment advisors and their representatives who do not qualify for federal registration. While each state has its own laws, known as Blue Sky Laws, the Uniform Securities Act is used as a template for the states. The act also contains provisions for the registration of broker-dealers, agents and securities
Michael is moving away from his practice in Philadelphia and wishes to sell his business to another trusted advisor, Godfrey. Michael has informed each of his Philadelphia clients of the sale and has received consent to assign their accounts to Godfrey. Is this legal?
Answer(s): D
Under the Uniform Securities Act, an investment advisor is required to obtain written client consent before any account is assigned to another party
The foremost rule in the Investment Advisor''s Act of 1940 regarding disclosure is:
The brochure rule describes the necessity for a registered investment advisor to provide full disclosure to an advisory client. Literally, a written disclosure document must be presented to the client within a specified time and must outline details such as: services provided, types of clients with the firm, types of securities transacted and advised upon, whether the firm acts as a broker dealer and affiliations with other securities professionals. The written disclosure may be submitted as Part II of Form ADV or within a brochure produced by the firm that would contain the same information as on ADV Part II
Patty Sampson has not been feeling well enough to manage the day to day activity of her investments. She trusts Denise, her financial advisor, implicitly and signs a document that permits Denise to trade in the account on Patty''s behalf. Denise will use her best judgment and has an ethical and fiduciary responsibility. This is known as:
Answer(s): B
Patty has given Denise discretionary authority over her account. Simply put, Denise has received a signed power of attorney to buy and sell within the account based on her experience, judgment and knowledge of her client's objectives. As a fiduciary, she is obligated to abide by all antifraud rules and client instruction
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