JustinCase Markets is a registered investment advisor in Santa Monica California. The company provides investment advisory services to other investors in nearby Nevada. Which of the following is true regarding Nevada state registration for JustinCase?
Answer(s): D
The Uniform Securities Act allows for two exemptions from state registration for investment advisors. The first is that the advisor must not have a place of business operating within that state AND that the investment advisor's clients are all institutional investors, i.e., other investment companies, other broker- dealers, banks, savings & loan associations, trust companies, insurance companies, government entities or employee benefit plans that total a minimum of $1 million in assets. The second exemption from registration states that no person must have a place of business in that state AND no direct communication to more than five clients in the state within 12 consecutive months (this is known as the de minimus exemption)
McNoughton Brothers Investor Group is an investment advisory run by three brothers, John, Paul and George. John, the President, has just announced that he will step down in six months. Paul and George must disclose this information promptly to current clients and within what period of time to prospective clients?
Answer(s): C
Disclosures must be made promptly to the firm's current clients and no less than 48 hours prior to entering into a contract with new client prospects
Which of the following agencies does NOT require client approval to obtain client files?
The FCC is the Federal Communications Commission, which governs broadcasting, cable, etc. It has no jurisdiction over client files at a financial institution. An investment company must keep all client files confidential and may only release files if ordered to do so by law or with client consent. The SEC, NASD and IRS are among agencies that are authorized to obtain those files
Mason Securities, a broker-dealer located in Dearborn, Michigan, is subject to a records inspection by the state administrator:
All broker-dealers are required to submit to periodic examinations of records as determined by the state administrator, regardless of whether the records are located within or outside of the state. State administrators may coordinate with the administrators of other states as well as with the SEC, other national exchanges and national securities associations in order to prevent duplicate inspections.
The SEC may do which of the following if there is suspicion that federal securities laws have been violated?
The SEC is the ultimate authority in the regulation and enforcement of federal securities laws. If a law is in violation or about to be violated, the government entity has the power to enact all three choices: asking witnesses to take an oath, subpoenaing documents and witnesses and gathering evidence of activities
Post your Comments and Discuss FINRA SERIES 66 exam prep with other Community members:
Our website is free, but we have to fight against AI bots and content theft. We're sorry for the inconvenience caused by these security measures. You can access the rest of the SERIES 66 content, but please register or login to continue.