ChockFull Advisory Services, located in Detroit, Michigan, is a newly formed advisor wishing to register with the SEC under the Investment Adviser''s Act of 1940. They have to file important documentation including which of the following:
Answer(s): A
Form ADV is a disclosure form required for registration by the SEC. It is divided into two parts: Form ADV Part 1 which discloses specific information that is important to regulators(name, number of employees, form of the organization, nature of the business, etc.) and Form ADV Part II which acts as a disclosure document for clients of the business (services provided and fees levied, whether the investment advisor acts as a broker-dealer and transacts securities, etc.)
Under the Uniform Securities Act, a state administrator may allow an investment advisor the authority to trade in a client account, but the advisor may not be allowed to remove client funds and securities from the account. This is known as:
Answer(s): D
Investment advisors often have their clients open accounts at a broker-dealer so that the advisor does not have to go through the process of obtaining state approval in order to take custody of client funds and securities. The advisor will then receive discretionary authority from the client in order to trade in the account on their behalf. The discretionary authority received is typically "limited discretion" whereby the advisor may transact in the account but is not allowed to remove funds or securities from the account
If an investment advisor does not have discretionary authority over a client account, which of the following is the advisor NOT allowed to decide?
Answer(s): B
When an investment advisor is not given discretionary authority over a client account, the client must provide instructions as to whether to buy or sell, the quantity involved (size of the order) and which security to trade. The advisor's judgment must be used in deciding when to trade at the best price
Homer Wilson made a written complaint to Shelly, his agent, about the timing of the trade she executed for him. Though the trade resulted in a profit for Homer, he believes that it could have been a substantially better deal if she had executed it sooner. He requests documentation that will show what time the trade was made. Is he entitled to this information?
Under the Uniform Securities Act, a broker-dealer must respond to a client's reasonable request for information regarding his or her account. The broker-dealer would be in violation of the act if it refused to do so
Under the Uniform Securities Act, which of the following does NOT define a security?
All options except a fixed annuity are considered securities by the Uniform Securities Act
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