Which of the following securities are required to be registered under the Securities Act of 1933 quizlet?

Most B/Ds and agents must be registered with:

Investment Advisors must register with either:

Investment advisors must register where?

With a place of business or any state where they have 6 or more retail clients.

If the IA is required to register with the SEC, that registration will be accomplished by filing:

If an IA is required to file with the SEC, they are NOT required to file with:

The state. Buy may have to file a notice.

IAR's are only registered at the _____ level.

For IAs and IARs it is unlawful to transact business in a state unless:

Registered under the Act OR Exempt from registration (No place of business in the state) AND their only clients in the state are: Investment companies, Other IAs, Federal covered advisors, B/Ds, Banks, Trust companies, Savings & loans associations, Insurance companies, Employee benefit plans with $1 mil+, Govt agencies, and Other institutional investors. (Not members of the public)

Examples of public investors:

-Individual investors, Accredited investors, Public employees, Private employees, and Trust accounts (minors)

The 5 client exemption only applies to:
Does NOT apply to:

It is unlawful for any IA that is required to register to employ:

An IAR unless the rep is also registered.

B/Ds can NOT employ an agent unless:

If an agent begins/terminates connection with a B-D/Issuer or begins/terminates agent activities, the agent/B-D/issuer MUST:

Notify the administrator promptly.

B/Ds and Agents cannot transact business in a state unless:

B/D registration: Automatic registration of:

Any Agent who is a partner, officer, director, or similar status/functions

IA automatic registration of:

Any IAR who is a partner, officer, director, or similar status/functions.

IA and B/D automatic registration is based on:

if the individual is acting in an agency or advisory capacity.

Reasoning for automatic registration:

Firm statements already contain qualification and business history of such executives.
Unnecessary to file the same information twice.

Administrators can _____ or ____ automatic registration.

B/D initial registration is active for:

The remainder of the current year until Dec 31st. Then renewed annually.

IA fees for registration are normally set for:

The year (usually not prorated for partial years)

Agents must renew their registration by:

December 31st of each year. 

An applicant cannot perform duties until:

Registration is effective.
Applicant could not sell any type of "security" - they could sell Fixed Annuities.

Changes in material fact must be reported:

Promptly to the Administrator(s)

Examples (3) of material changes:

-Changes in ownership -Changes of address/contact info (firm) -Change to registrations/registered employees

Registration as an IA, B/D, or Agent DOES NOT mean:

approval or qualifying the firm

A Canadian agent must limit contact to:

-People vacationing in the US -People who have a self-directed, tax-advantaged retirement plan in Canada, administered through a Canadian B/D.

Canadian B/D and Agents require:

• Filing application with appropriate Canadian authority
• Filing consent to service of process
• Reg in good standing in the jurisdiction the firm/agent is effecting transactions
• B/Ds must be members of a SRO or Canadian Stock Exchange

(Renewal applications must be filed annually by Dec. 1st)

Canadian renewal applications must be filed annually by:

State Administrators may require Surety Bonds if:

IAs, B/Ds, or agents plan to have custody of/discretion over clients assets.

Purpose of a surety bond?

Insure that the registrants have sufficient funds to cover losses to customers resulting from theft or other dishonesty they are legally liable for.

Surety bonds must have: (6)

• Proof of loss is required to support a claim
• Amount is set by Administrator
• Amount applied to B/Ds may not exceed the federal law amount
• Must be kept in force as long as registrant is in business and 3 years thereafter
• not required of B/Ds & IAs who meet minimum net capital
• Registrants may deposit cash/securities with the Administrator, instead posting a bond

B/Ds who have custody of client funds/securities or discretion over clients accounts may be required to have:

- Minimum capital (set by the administrator - subject to limitations of the '34 Act) - Surety Bond (set by administrator - MAY vary state to state - subject to limitations of the '34 Act) - Examination of books (set by administrator)

No state to establish financial or operational reporting requirements for B/Ds that differ from or additional to:

Agents who have discretionary authority over client funds may be required to have:

Surety bonds and qualification examinations.
NOT required to have minimum capital requirements

IAs who have custody of client funds or securities or have discretion over client accounts may be required to have:

Minimum capital, Surety bonds, and Examination or books.

Federal covered advisors are subject to requirements of:

Investment Advisers Act of 1940.

The USA is silent regarding bonding and other requirements for:

IARs. Therefore, such requirements would be left to the

.

The administrator have the ability to administer what type of exams?

When an agent begins or terminates employement: Administrator must be __________.

Promptly notified. Agent and B/D are responsible for the notification or termination.

When an IAR begins are terminates employment, responsibility of termination notification depends on the type of firm. State registered IAs: _______ Federal Registered IAs: ________

The IA is responsible; The IAR is responsible.

Termination of Agents and IARs is reported on:

What is filing (Notice filing)?

Filing is a form of registration generally used when the company has a registration statement on file with the SEC and has already issued securities. Though defined as one of the 3 forms of registration in the USA, it is not considered full "registration" in the same manner as registration by "qualification."

Registration of IARs under USA?

IARs are the people who provide advice at investment advisory firms. IARs must be registered in the state or states where they do business. IARs are not registered at the federal level and there is no such thing as a Federally Covered IAR.

Under the UAS, when must changes to material facts be reported to the Administrator?

PROMPTLY. Changes to material facts must be reported promptly to the Administrator by all issuers with registered securities, registered firms, and registered persons.

USA Registration Applications - Forms BD and ADV:

1. the applicants form of organization and place of business 2. the application proposed method of doing business 3. the qualifications and business history of the applicant 4. any injunction, stop orders or convictions for any felony 5. the applicants financial conditions and history 6. IF and IA, a copy of the brochure

Under the USA, what are the four items included in the initial registration?

1. Applications 2. Registration fee 3. Consent to service of process 4. A bond as the Administrators may be prescribed

Exempt securities under the USA (11):

• US Treasury or federal agency issues
• Municipal securities
• Securities issed/guaranteed by the country of Canada or its provinces
• Bank, savings and loans, or trust co securities
• Credit unions
• Insurance company securities
• Securities listed on a registered exchange
• Promissory notes
• Public utility or common carrier
• Investment contracts
• Non-profits

Exemptions from the definition of IA under:

An IA firm is not required to register under the USA if the IA has NO place of business in the state and: 1. Their only clients are institutions 2 during any 12 month period, the IA does not direct communications to and has no more than 5 retail clients in the state. (Note that if the firm has a place of business in the state, registration would be required.)

Administrators are given the authority to, by order, cancel registrations or applications for what 3 reasons?

The registrant or applicant: 1. Is no longer in existence or has ceased doing business 2. Is subject to an adjudication of mental incompetence 3. Cannot be located after a reasonable search
Outside these scenarios, an Administrator that wishes to deny, revoke, or suspend a registration must follow procedures listed in the USA.

Exempt transactions (10) under the USA:

• Isolated non-issuer transactions
• Unsolicited transactions
• Fiduciary transactions
• Bonafide pledges
• Underwriter transactions
• Transaction with financial institutions
• Private placement (not more than 10 persons)
• Mortgage bonds (units)
• Pre-organiztion subscription transactions
• Rights, warrants, or convertible securities (no commission paid)

Registration by qualification:

Qualification is a form of registration used when registration is not required at the Federal level. Registration applications are filed in each state where the issuer wishes to sell securities. 

Which exemptions from registration and filing of advertising may be denied/revoked by administrative order at the state level?

1. Securities listed on a national exchange 2. Securities issued by non-profits 3. Investment contracts issued in connection with employee stock plans or pension plans 4. Any exempt transaction

Registration of IAs at the federal and state levels:

IAs are registered with either the SEC or the states, but not both. Large IA firms are registered with the SEC and are considered FCA. These FCA may have to file in the states where they do business, but not have to register. Smaller IA firms register at the state level with the state administrator or administrators. 

Requirements for an IA to do business in a state under the USA:

TO do an advisory business int a state, an IA must satisfy one of the following 3 requirements. The IA must be:

• Registered with the state
• Exempt form registration
• FCA (registered with the SEC)

Automatic registration of key persons at B/Ds and IAs under the USA:

Under the USA, partners, officers, and directors of B/Ds and IAs are automatically registered as agents and IARs, respectively, when their firms initial registration becomes effective. If these persons function in the capacity of an agents or IAR, additional requirements may exist, such as examination, etc.

Under the USA, what is the minimum net capital requirement for an IA firm which has custody of client funds?

Minimum net capital requirements are set by the Administrator subject to limitations set forth in the Securities Exchange Act of 1934 and the Investment Advisers Act of 1940. In the words, Administrators have authority within the guidelines of federal law.

Registration of B/Ds under state and federal law:

Most B/Ds must be registered at the federal level AND in the state or states where they have offices and do business. Exemptions do exist form this registration requirement.

Registration by coordination:

Coordination is a form of registration generally used for new issues whose registration is pending with the SEC AND simultaneously duplicate copies of the registration are coordinated with the state or stated where the security will be sold.

Under the USA, what is the minimum net capital requirement for a B/D firm which has custody of client funds?

Minimum net capital requirement are set by the administrator subject to limitations set forth in the Securities Exchange Act of 1934 and the Investment Advisers Act of 1940. In other words, Administrators have authority within the guidelines of federal law.

When initial registration is filed, it MUSt include:

An application, a registration fee, a consent to service of process, and a bond (amount prescribed by the administrator).

What is a consent of service of process?

Allows the administrator to be served with legal documents when the applicant is being sued.

Every application for registration must contain:

• Form and place of business
  
• Proposed method of doing business
• Qualifications and business history
• Any injunction/admin order/conviction of securities related misdemeanor and any conviction of a felony
• Financial condition and history
• Information to be given to clients - if an IA

Name 2 things that do NOT have to be disclosed on an application for registration:

Salaries of officers and partners and names/SSNs of all employees.

Registration becomes effective when determined by the administrator, "automatically" at what time?

"Automatically" effective at noon on the 30th day post application filing. Administrators may advance or delay effective date.

If reorganization happens in the middle of registration, they can file an application to:

the successor firm (in existence or not) for the unused portion of the year.

An administrator may deny, suspend, or revoke _____. They can bar or censure ______. If the order is in the ____________ and (13):

Registration; Registrant; Public interest; the applicant filed a false application, willfully violated the USA, has been convicted of securities misdemeanor (past 10 yrs), any felony convictions, enjoined by any court involving securities, fraudulent acts, subject of administrator, violated FINRA rules (10 yrs), insolvent, failed to supervise employees, not qualified in securities, failed to pay for filing fees, and willfully violated law of foreign jurisdiction (past 5 yrs)

Intentional vs. Unintentional examples?

Intentional: Registered agent trading in a customers account without authorization. Unintentional: Registered assistant trading in a customers account with authorization.

Solvency: IAR with prior declaration of bankruptcy grounds for registration denial?

No. Not grounds for registration denial.

Solvency: Limited partners with prior declaration of bankruptcy grounds for registration revocation?

No. Not grounds for registration revocation.

What are not adequate grounds for an administrator to deny, suspend, or revoke a registration or application for registration?

Minor rule infractions, accusations, and filings of civil lawsuits alone.

Registration IS reviewed by ______. Registration IS NOT filed by _______.

Administrators; Administrators.

Registration MAY be cancelled if:

The person does not exist or can not be located, person ceased doing business, or the the person is found mentally incompetent.

Withdrawal from registration becomes effective when?

30 days after receipt of application for withdrawal. 

If an agent or IAR leaves employment at a firm and does not transfer to another firm, registration of the agent or IAR is:

NOT effective while not employed by a registered firm.

After 2 years of inactivity, the agent or IAR will need to:

re-take exams to function in a registered capacity.

New issues of securities to public must generally be registered with:

The states they will be sold.
Unless they are exempt, are an exemption, or are a FCA. Most new issues qualify as federally covered.

A product NOT considered a security under the USA:

NO NEED to register with the state.

An OTC security sold intrastate would have to be registered at the state if:

It did not qualify for an exemption and was NOT federally covered and it fell under the definition of a security under the USA. Ex: Penny stock.

It is unlawful to offer or sell securities

unless:

• Security is registered under the act
• Security is exempt from registration
• Security is a federal covered security

Registration by coordination with the SEC and several state administrators would not require coordination with:

FINRA, NASAA, and MSRB under regulations of USA.

Satisfying state registration:

Securities can be "lawfully sold" in a state after effective registration.

State registration requirements may be satisfied by: (3)

• Notice filing (Form of registration used by FCS or established company with registration statement on file with SEC)
• Coordination (form of registration used for NEW issues with pending registration with SEC)
• Qualification (form registration used for NEW issue of securities not registered with SEC but State of Issuance only

Conditions that may have to be satisfied in a notice filing:

• Engaged in business in US for 36 months
  
• Securities held by 500 or more persons
• Net worth of $4 million
• Net worth of $2 million and net pre-tax income for 2 of 3 previous fiscal years

Ex: Mutual funds

When state registration is satisfied through coordination, when will the state registration become effective?

When the

registration becomes effective. Ex: An IPO of a new NASDAQ stock.

Qualification is used for: (4)

• Securities not generally filed with SEC but registered (qualified) in state of issuance
• Registration statement must be filed with the state
• Distribution of a prospectus may be required
• Registration effective when administrator so orders

Ex: Small company making intrastate offering All 3 forms of registration require consent to service of process form and filing fees - usually effective for 1 year.

Administrators may issue stop order denying effectiveness to it that order is in the public interest and that:

• Incomplete registration statement or false or misleading,
  
• provision of the USA has been willfully violated,
  
• registered security is subject of administrative stop
  
• Issuers business activities illegal where performed (ex: racetrack or casino)
• Would work a fraud on purchasers
• Unfair, unjust, or inequitable offering
• Unreaonable amounts of commissions, discounts, etc
• Notification registered security, but not eligible for such registration
• Coordination registered security, w/ failure to forward prospectus amendments
• Applicant/registrant failed to pay filing fees

No stop order may be entered without prior notice to:

Applicant/registrant, issuer, or behalf of person securities are offered. Note: SRO (FINRA) notification is NOT required

Administrators MAY NOT institute a stop order:

Against an effective registration, due to a fact known to the administrator when registration became effective unless within 30 days or because of a new company and no operating history.

After effective registration, statement

be amended to change:

The

offered/sold

The final prospectus must be received by the customers no later than:

The purchase confirmation of new issues.

A buyer of securities in private placement receives:

An agent may not lawfully offer to sell securities in a:

Registration allows securities to be sold in:

The USA contains exemptions from requirements that all securities must be registered. The exemptions are:

Securities (like govt and munis) and transactions (like underwriters and institutional investors)

Exempt securities and transactions are ONLY exempt from:

Registration requirements and filing of advertising and sales literature.
Note: All securities are subject to anti-fraud provisions

A fixed annuity offered by an insurance company would NOT be subject to: 

Anti-fraud provisions. They are not considered securities.

Securities issued by well-known, very credit worthy issuers such as govts, financial institutions, and some blue chip companies are exempt from state registration and advertising filing requirements (generally new issues). Securities include:

Corporate bonds/other corporate securities issued by companies that don't qualify for exemptions are NOT included as"

"exempt" securities - therefore require registration. 

Exempt transactions: Transactions that do not include issuers or underwriters involved in a public offering and exempt from registration requirements include:

• Isolated "non-issuer" transactions (whether effected through a B/D or not)
  
• "Isolated" - separate/stand alone from other trades
  
• "Non-issuer" - No benefit to the issuer. Stock has been issued and trading in secondary market.
  

Non-issuer transactions by registered agents at registered B/D if: The issuer of security being traded

engaged in business and is

:

• In the organizational stage
• In the bankruptcy or receivership state (going out of business)
• A blank check, blind pool, or shell company

-Typically have no stated investment objective/ no intended investments upon formation - Generally legitimate businesses, used for unethical purposed and DO NOT qualify.
The security is senior in rank to common stock and outstanding for at least 3 years without default.

What is an unsolicited order?

An order initiated by a customer without direction or a recommendation by a representative.

Exempt transaction examples:

• Non-issuer transactions for unsolicited orders
• Fiduciary transactions
• Bona fide pledges
• Underwriters transactions (not to the public)
• Transactions with financial institutions
• Private placements (sold to not more than 10 persons)
• Mortgage bond transactions issued as a unit
• Pre-organization subscription transactions
• Rights, warrants, convertible securities transactions

Conditions to be met to make a pre-organization subscription transaction exempt from registration:

• 10 or less subscribers
  
• No commissions paid
  
• Payments made AFTER security is registered
  
• Advertising is acceptable
  

An administrator may revoke certain following exemptions:

• Exempt transactions
  
• Exchange listed securities
  
• Non-profit securities
  
• Employee benefit plan issued investment contracts
  

NO order to deny an exemption may be made retroactive.

Of the following securities, which is always exempt from registration under the USA?
[A] A Canadian drilling company's common stock [B] The preferred stock of the parent company of an insurance company [C] The equipment trust certificates of a government-regulated railroad company [D] An interest in a limited partnership which partially invests in federal savings and loan association securities

Answer: CAlthough securities issued by U.S. insurers are exempt from registration, securities issued by their holding companies are not exempt. The equipment trust certificates of government-regulated railroad companies are exempt.

After initial registration of a Broker-Dealer Firm, all of the following statements would apply to the firm except:
[A] The Administrator may conduct investigations within or outside of the state at any time [B] The Firm is subject to record keeping requirements [C] The Administrator may publish information concerning any violation [D] The Firm is only required to file material changes with the State semi-annually

Answer: DBroker-dealers are subject to record keeping requirements. The Administrator may conduct investigations within or outside of the state, and may publish information concerning any violation. If there are material changes in the manner in which the Broker-Dealer does business PROMPT notification, not semi-annual notification is required.

According to the Uniform Securities Act, which of the following exemptions may the Administrator deny or revoke by order
I.   Any exempt transaction II.   Exchange-listed securities III.   Securities of non-profit organizations IV.   Investment contracts issued by employee benefit plans
[A] I and II [B] III and IV [C] I, II, and III [D] I, II, III, and IV

Answer: DAn Administrator may by order revoke or deny certain exemptions including the following: exempt transactions, exchange listed securities, securities of non-profit organizations and/or investment contracts issued by employee benefit plans.

Under the Uniform Securities Act, the administrator may deny or revoke the investment advisor's registration in all of the following situations except:
[A] The principal of the advisor is insolvent and cannot meet personal obligations as they are due and liabilities of the principal exceed assets. [B] The advisor cannot meet obligations as they are due. [C] The principal of the advisor and the advisor's liabilities exceed their assets. [D] The advisor is insolvent in that it cannot meet obligations as they are due and its liabilities exceed its assets.

Answer: AChoice "A" makes reference only to the principal of the investment advisory firm becoming insolvent. Therefore they would not deny or revoke the firms registration.

According to the Uniform Securities Act, which of the following is true regarding the registration of securities?
[A] Registration by coordination becomes effective on a date ordered by the Administrator. [B] The Administrator may require that a prospectus be delivered to every purchaser of a registered security no sooner than the time at which the security is delivered. [C] The effectiveness of a registration statement assures the accuracy of the information contained in the statement. [D] State registration by coordination is available only if a federal registration statement has been filed under the Securities Act of 1933 in connection with the same offering

Answer: DAccording to the Uniform Securities Act, registration by coordination becomes effective when the Federal registration becomes effective and when an issue's registration is pending with the SEC and all filings are "coordinated".

An IA must be registered in a state under the USA even if it has no place of business in the state if:
[A] its only clients in the state are Investment Advisers. [B] its only clients in the state are considered accredited investors. [C] its only clients in the state are insurers. [D] during a 12 month period, it directs business communications to a maximum of 5 clients in the state.

Answer: BSelling to an Accredited investor would require IA registration. The other choices are all expressly exempt from registration.

An agent at a broker/dealer is considering selling interests in an oil and gas limited partnership. The agent isn’t sure of the registration requirements for such a security. Does an interest in a limited partnership qualify for an exemption from the registration and advertisement filing requirements of the Uniform Securities Act?
[A] Yes, interests in limited partnerships are not defined as “securities” under the Uniform Securities Act definition, and therefore qualify for exemption from registration and advertisement filing requirements. [B] No, interests in limited partnerships are defined as securities and are not listed under the exemptions for registration and advertisement filing requirements. [C] Yes, interests in limited partnerships are defined as “securities” under the Uniform Securities Act definition, but they are listed under the exemptions for registration and advertisement filing requirements. [D] No, interests in limited partnerships are considered restricted securities in all scenarios and the Uniform Securities Act prohibits the sale of such interests.

Answer: BThe Uniform Securities Act definition of “security” includes certificates of interest or participation in an oil, gas, mining title or lease or in payments out of production under such a title or lease. Being defined as a security, an exemption would have to exist in order for such “securities” to be exempt from registration and advertisement filing requirements. Such an exemption does NOT exist under the Uniform Securities Act, and therefore, interests in limited partnerships must be registered under the Uniform Securities Act.

Under the Uniform Securities Act, an investment advisor is required to advise a client about:
I.   Change of address. II.   Addition of new partners to the advisory partnership. III.   Change of advisor's phone number. IV.   Addition of new client accounts.
[A] I and III [B] II and IV [C] I, II, III [D] I, II, III, IV

Answer: CInvestment Advisors must disclose to clients any change in the address of the Advisor, any addition of new partners of the advisory partnership, and any change in the Advisors phone number, but do not have to disclose the addition or deletion of clients of the Advisor.

Which of the following are NOT exempt from the sections of the Uniform Securities Act which require registration and filing of advertising materials?
I. Secured bonds issued by a common carrier such as a railroad company. II. Equity options related to a stock that trades over-the-counter. III.   Bonds issued by the country of Cuba. IV.   Debentures issued by a bank or federal credit union. [A] I and III only [B] I and IV only [C] II and III only [D] II and IV only

Answer: CUnder the Uniform Securities Act, equity options that are not listed or tied to a listed security would not be exempt from registration and filing of advertising materials. As well, bonds issued by the country of Cuba would not qualify for any exemptions. Securities issued by common carriers, banks, and federal credit unions do qualify for exemptions under the Uniform Securities Act.

A limited partnership is formed for the purpose of an oil and gas exploration program. In which of the following scenarios would the interests in the oil and gas exploration program be exempt from registration?
[A] The general partner(s) of the limited partnership participate in a separate entity which has qualified for exemption from registration due to non-profit status. [B] The limited partners of the limited partnership participate in a separate entity which has qualified for exemption from registration due to non-profit status. [C] The general partner(s) of the limited partnership serve as executives at a corporation which has securities that are listed on a national stock exchange. [D] None of the exemptions listed above would apply to the interests in the limited partnership.

Answer: DWhen it comes to the formation of a limited partnership and sales of interests in a limited partnership, registration would be required, because the Uniform Securities Act considers these interests to be “securities”. Just because a general partner or limited partner participates in some separate entity which qualifies for exemption does NOT mean that the exemptions carry over to this limited partnership (which again, is a separate entity).

According to the Uniform Securities Act, when an agent's registration is revoked for a violation, the administrator may deny any future application submitted by the person for registration by an:
I.   agent II.   broker/dealer III.   investment advisor IV.   financial and operations principal
[A] I, IV [B] II, III [C] I, II, III [D] I, II, III, IV

Answer: DWhen an agent's registration has been revoked, the Administrator may deny an application filed by anyone on behalf of the former agent.

A registered agent could engage in which of the following?
I.   A transaction in an exempt security. II.   An exempt transaction. III.   A transaction involving a registered security.
[A] I [B] II and III [C] I and III [D] All

Answer: DAll three choices represent situations where transactions would be allowed. Exempt securities would include securities listed on an exchange. Exempt transactions are normal everyday secondary market trades by customers. Trades in registered securities would be allowed in non-exempt securities and non-exempt transactions.

An administrator may require an issuer that registers a security by qualification to deliver a prospectus to a buyer
[A] prior to the sale of the security [B] prior to the delivery date but after the sale [C] on the settlement date [D] no later than 5 days after settlement date

Answer: AThe administrator may require that an issuer deliver a prospectus with every offer, rather than the usual requirement of no later than the completion of the purchase.

An agent is not registered and is employed by and represents a broker/dealer which is registered. Who has violated the Act?
[A] Agent [B] Broker/dealer [C] Both [D] Neither

Answer: CEven though the Broker/Dealer is registered, they are required to make sure all agents that represent them are also registered.

An agent of a broker-dealer has NOT "willfully" violated a provision of the Uniform Securities Act in which of the following situations?
[A] The agent recommends unsuitable investments to clients regularly. [B] The agent trades excessively in a client's discretionary account both in size and frequency. [C] The agent buys a security for several clients without the proper authority or the client's knowledge and approval. [D] The agent's assistant buys a security for the client's account without notifying the agent.

Answer: D"Willfully" means that the agent would have had to have known of the violation. Though an agent is expected to "know" their client's account, an agent cannot be held responsible for a violation of which they have no knowledge.

A registration of securities by coordination becomes effective in a state:
[A] At the time of the filing of the registration statement. [B] At the same time as the federal registration becomes effective. [C] 10 days after the filing of the registration statement. [D] 15 days after the filing of the registration statement.

Answer: BRegistration by "Coordination" becomes effective when the issue is approved at the Federal level.

An agent at a registered broker/dealer is trying to determine what transactions are exempt from registration and what transactions require registration. The Uniform Securities Act exemption for transactions effected by or through a registered broker/dealer is specific in nature and includes which of the following language?
I.   Transactions must be non-issuer, meaning not involving a primary offering of securities for the issuer. II.   Transactions must be made pursuant to an unsolicited order or offer to buy. III.   The Administrator of a State may by rule require that the customer provide a signed acknowledgement that the sale or order was unsolicited. IV.   The Administrator of a State may also require that any acknowledgement signed by the customer be preserved by the broker/dealer firm for a specified period of time.
[A] I only [B] I and II only [C] III and IV only [D] I, II, III, and IV

Answer: DEach of the items listed apply to the exemption for transactions with a registered broker/dealer. Simply assuming that all transactions with a registered broker/dealer are exempt would be inaccurate. Specific criteria must be met including the non-issuer aspect and the order being unsolicited.

Which of the following securities are listed as exempt when it comes to the registration and advertising filing requirements of the Uniform Securities Act?
I.   Securities of a corporation that trade over-the-counter II.   Securities that are issued by the US Government or the Canadian Government III.   Securities of a railroad company operating intrastate IV.   Securities of a company that was once non-profit but is now a for-profit entity
[A] I and III [B] I and IV [C] II and III [D] II and IV

Answer: COf the securities listed, the securities of the governments of the US and Canada, as well as those of a common carrier, the railroad company, would be exempt from registration as well as the advertising filing requirements of the Uniform Securities Act. Over-the-counter securities are not automatically exempt. Securities of a company that is now for-profit would also not be exempt.

Under the Uniform Securities Act, certain securities are listed as “exempt”. From which of the following are these securities exempt?
I.   Anti-fraud provisions of Federal Securities law II.   Registration requirements III.   Administrative investigations IV.   Filing of advertising and sales literature
[A] I & III [B] II & IV [C] II & III [D] I, II, III, IV

Answer: BUnder the Uniform Securities Act, exempt securities are securities which are exempt from state registration requirements and the filing of advertising. All securities are subject to the anti-fraud provisions of Federal securities law. Administrators may make public or private investigations within or outside the state at any time. Administrators are permitted to investigate within their state if wrongdoing is suspected, even on exempt securities.

A broker-dealer amends its Form BD filing with a State Administrator to show a change in its business plan to now have custody over its client's funds and securities. Under the USA, the State Administrator:
[A] may require the broker-dealer to post a surety bond with the Administrator. [B] must require the broker-dealer to post a surety bond with the Administrator. [C] may require a surety bond even if the broker-dealer meets minimum net capital requirements. [D] may not require a surety bond because this is within the exclusive jurisdiction of the SEC.

Answer: AUnder the USA, the Administrator may require a surety bond at his/her discretion. The Administrator may not require a bond if the broker-dealer meets the minimum net capital requirements. Although the amount of the bond is within the discretion of the Administrator, it may not exceed. the amount required by the SEC under federal law.  

According to the Uniform Securities Act, which of the following may be required for registration as an investment advisor?
[A] Publication of an announcement of the application for registration in a newspaper [B] Meeting of minimum financial requirements [C] Both A and B [D] Neither A or B

Answer: CUnder the Uniform Securities Act, both the publication of an announcement of the application for registration in a newspaper and meeting minimum financial requirements may be required for registration.

According to the Uniform Securities Act, which of the following is an exempt security as opposed to an exempt transaction?
[A] securities in the OTC market [B] the common stock of a European insurance company [C] securities listed on the New York Stock Exchange [D] the debentures of companies incorporated in the state of Delaware

Answer: CBy definition of the Uniform Securities Act, securities listed on a registered stock exchange are considered to be Exempt Securities. The reason they are exempt is because the listing requirements for the exchanges is more stringent than any state's requirements.

Under the provisions of the Uniform Securities Act, which of the following is NOT required for a preorganization subscription to be an exempt transaction?
[A] There may be no more than 10 subscribers. [B] The offer of the security may not be advertised. [C] No commission may be paid to anyone for soliciting potential subscribers. [D] No payment may be made by any subscriber.

Answer: BAdvertising is acceptable when Pre-organization Subscriptions are offered.

Brett is an officer of a firm applying for IA registration. Which is true regarding Brett’s registration?
[A] It requires separate documentation and approval by the State. [B] Filing by the firm automatically constitutes registration of Brett since he is an officer of the firm. [C] Brett would have to be approved by the Administrator. [D] Brett would not be required to be registered at all.

Answer: BUnder the USA registration of an Investment Advisory Firm automatically constitutes registration of any investment advisor representative who is also partner, officer, or director. The rule does not cover all equity owners of the firm. Those automatically registered may still have to take qualification examinations. Automatic registration is more a matter of avoiding duplication of paperwork.

Investment Banking Advisors Unlimited (IBAU) offers advice to clients seeking investment banking services and also participates in investment banking activities on occasion. The firm is located in California. The firm is contacted by an institutional firm in Nevada which pays IBAU a transaction-based fee for their services. Otherwise, IBAU has no other clients, retail or institutional in Nevada. According to the rules of the Uniform Securities Act, which of the following would be TRUE for Investment Banking Advisors Unlimited in terms of registration?
[A] Because the firm does any form of business in Nevada, the firm would be required to register there. [B] Because the firm does transaction-based business in Nevada, the firm would be required to register there. [C] Because the firm has no office or retail clients in Nevada, the firm would not be required to register there. [D] Because the firm has only one client, regardless of type, in Nevada, the firm would not be required to register there.

Answer: CIn this scenario, Investment Banking Advisors Unlimited would be exempt from registration in Nevada because they have no office in Nevada and they service no retail clients in Nevada. If the firm had even one retail client in Nevada, the firm would likely have to register in that state, since investment banking activities fall under broker/dealer definitions of the Uniform Securities Act and broker/dealers do not have the 5-client exemption like investment advisory firms.

According to the Uniform Securities Act, which of the following is true regarding registration of investment adviser representatives?
[A] Representatives are automatically registered when they become employed by a registered investment adviser. [B] A representative's registration remains in effect even during a period when the representative is not employed by a registered investment adviser. [C] Registration in the state where a representative has his or her business office enables the representative to do business in any state. [D] To register, a representative must submit a completed application for registration, a filing fee, and a signed consent to service of process

Answer: DOf the choices offered the only choice which is correct is "D". In order to register, an investment advisor representative would have to submit an application, a filing fee, and a signed consent to service of process. Registration is NOT automatic.

When there is a change of ownership by a registrant, the registrant must do which of the following under the Uniform Securities Act?
[A] Contact the Administrator and promptly file an entirely new application. [B] Contact the Administrator and promptly go about filing a correcting amendment to the Administrator. [C] By maintaining books and records that reflect the change, the registrant provides notice to the Administrator. [D] At the time of renewal of registration, the registrant must file a correcting amendment with the Administrator.

Answer: BMaterial changes in the registration of applicants to an Administrator must be promptly submitted to the Administrator. A correcting amendment is all that is necessary, but it must be filed promptly, not with the annual renewal.

An Investment Adviser has its main office in State X, with offices in States Y, and Z. The IA also has institutional clients in States A, and B. Once a year the adviser holds a seminar and solicits business in State M. In what States would the IA need to be registered?
[A] States X, Y, and Z [B] States A, B, and M [C] States X, Y, Z, and M [D] None of the Above

Answer: CAn IA would be registered where the IA has a place of business, or solicit business. If the IA has no place of business (States A and B) and only deals with institutional clients, the IA is exempt.

Which of the following are exempt from the sections of the Uniform Securities Act which require registration and filing of advertising materials?
I.   Common and preferred stock issued by a corporation and sold over-the-counter II.   Debt securities issued by the United States as well as those issued by the Canadian Government III.   Bonds and debentures issued by a corporation and sold over-the-counter IV.   Securities such as common stock that are listed on a stock exchange such as the NYSE
[A] I and II only [B] II and III only [C] III and IV only [D] II and IV only

Answer: DThe Uniform Securities Act provides exemptions for US Government Securities, securities issued or guaranteed by the country of Canada, and securities that are listed on national exchanges such as the New York Stock Exchange, American Stock Exchange, and the Midwest Stock Exchange. Corporate equity and debt securities that are sold over-the-counter (not listed) are not necessarily exempt from the registration and filing of advertising, unless these securities qualify for some other exemption. In this case, these corporate securities are not exempt.

An Administrator decides to revoke an exemption which was previously offered in the Administrator’s state. Because abuses of this exemption have been taking place for several years, the Administrator decides to pre-date the revocation, making this revocation retroactive. This will allow the Administrator to prosecute those who abused the exemption. Which of the following is TRUE of this scenario?
[A] These actions are within the scope of the Administrator’s authority. [B] The Administrator is permitted to issue revocations with relation to exemptions, but is not permitted to do so retroactively. [C] The Administrator is permitted to issue revocations with relation to exemptions, but must provide prior notice to all affected parties when such revocations are performed retroactively. [D] The Administrator is permitted to issue revocations with relation to exemptions but may only do so once annually.

Answer: BAdministrators have the authority to deny or revoke exemptions without prior notice to parties affected. No hearing would be necessary either. However, the Administrator is NOT permitted to issue orders that are retroactive.

Under the Uniform Securities Act, if the Administrator does not deny an application for registration and no disciplinary proceeding is underway in regard to it, how long after filing of the application does registration generally become effective?
[A] 5 days [B] 7 days [C] 10 days [D] 30 days

Answer: DIf there are no proceedings pending and there is no denial in effect, registration generally becomes effective in 30 days.

An Investment Advisor has its main office in State X, with offices in States Y, and Z. The IA also has 10 retail clients in both State A, and B. Once a year the advisor holds a seminar and solicits business in State M. In what states does the IA need to be registered?
[A] States X, Y, and Z [B] States A, B, and M [C] All of the Above [D] None of the Above

Answer: CAn "IA" that is not identified as a Federal Covered Advisor, would need to register where it has a place of business, where it has 6 or more retail clients, and where it solicits potential clients.

An investment advisor headquartered in State A wishes to solicit customers in State B. Which statements are true?
I.   If the investment advisor has an office in State B, it must register in State B. II.   If the investment advisor has an office in State B, it need not register in State B. III.   If the investment advisor has no office in State B, it must register in State B. IV.   If the investment advisor has no office in State B, it need not register in State B.
[A] I and III [B] II and IV [C] I and IV [D] II and III

Answer: AInvestment Advisors and Investment Advisor Representatives must be registered in a state if advisory services are going to be offered to the public.

According to the Uniform Securities Act, which of the following is NOT an exempt transaction?
[A] The sale of US government securities by a registered government securities dealer [B] Pre-organization subscription transactions [C] A sale of securities by the executor of an estate [D] A sale of stock through a rights offering to existing shareholders of the issuing corporation if no commission is paid

Answer: AChoices B, C, & D are specifically listed as Exempt Transactions. Although Government "securities" are exempt securities, transactions in government securities are not included in the list of exemption transactions. 

Under the Uniform Securities Act, it is unlawful for any person to offer or sell any security in a state unless the security is registered, exempt from registration or is a federal covered security. When a security is registered with a state it means that the security can be lawfully sold in that state
[A] Upon the filing of the registration [B] Upon approval of the registration [C] Upon the effective date of the registration [D] Upon completion of 30 days from the date of filing

Answer: CRegistration with a state means that the securities can be lawfully sold in that state after the registration becomes effective. Once a security is "registered", it can be lawfully sold to the public. 

A broker-dealer's state registrations under the Uniform Securities Act expires:
[A] on December 31st unless it is renewed [B] on the anniversary date of the initial registration unless renewed [C] when clients no longer exist in that state [D] when it ceases to have an office in the state

Answer: ABy definition, the B/D's registration expires December 31st unless renewed.

According to the Uniform Securities Act a buyer of securities in a private placement offering receives:
[A] Unregistered securities [B] Registered securities [C] A letter representing the security [D] Securities which can be readily sold

Answer: AAll Private Placement securities are securities which have not gone through the normal registration process with SEC and are therefore classified as unregistered securities.

The Administrator of a State is permitted to suspend or revoke a registration for a firm if which of the following have occurred?
I.   The firm’s registration as a member firm with FINRA (Financial Industry Regulatory Authority) has been suspended. II.   The firm’s registration as a member firm with the NFA (National Futures Association) has been suspended. III.   The firm’s registration as a member firm with a State Insurance Commissioner has been suspended. IV.   The firm’s registration related to banking has been revoked in the country of Canada.
[A] I and II only [B] I and III only [C] I, II, and III only [D] I, II, III, and IV

Answer: DThe Uniform Securities Act states that a registrant’s registration can be revoked by the Administrator if the registrant has had a revocation or suspension of registration by any securities regulator or securities regulator of a foreign jurisdiction in the past 5 years.

According to the Uniform Securities Act, exemptions which an administrator is permitted to deny or revoke would include which of the following?
I.   the secondary sale of bonds issued by a municipality in another state II.   the sale of stock by an executor of an estate III.   the sale of securities to a bank
[A] II only [B] I, III [C] II, III [D] I, II, III

Answer: DAll choices offered represent "exempt transactions" which an administrator could deny or revoke. I. would be considered to be an "isolated Non-issuer transaction. Remember that the administrator could not make the revocation of an exemption retroactive.

According to the Uniform Securities Act, an investment advisor must notify the Administrator of the termination of an agent's employment:
[A] Promptly [B] Within 30 days of termination. [C] When the renewal registration is filed in the State. [D] Only if the employee will not associate with another advisory firm.

Answer: AAccording to the Uniform Securities Act the Administrator must be promptly notified when an agent begins or terminates employment.

Under the Uniform Securities Act when a registered Agent of a Broker-Dealer moves their personal residence when does that person’s registration application have to be updated?
[A] The Agent’s registration application would not have to be updated if the address of the firm that they are registered with has not changed. The Agent simply has to notify their broker-dealer. [B] The Agent’s registration application would have to be updated within 10 business days of the change in address. [C] The Agent’s registration application would have to be updated promptly. [D] The Agent’s registration application would have to be updated with the next annual renewal date of the Agent’s registration.

Answer: C Under the Uniform Securities Act, an Agent’s application would have to amended “promptly” when the Agent has change in their home address.

An administrator may require an issuer that registers a security by qualification to deliver a prospectus to a buyer
[A] prior to the sale of the security [B] prior to the delivery date but after the sale [C] on the settlement date [D] no later than 5 days after settlement date

Answer: A The administrator may require that an issuer deliver a prospectus with every offer, rather than the usual requirement of no later than the completion of the purchase.

A broker-dealer's state registrations under the Uniform Securities Act expires:
[A] on December 31st unless it is renewed [B] on the anniversary date of the initial registration unless renewed [C] when clients no longer exist in that state [D] when it ceases to have an office in the state

Answer: A By definition, the B/D's registration expires December 31st unless renewed.

Under the Uniform Securities Act, Investment Adviser Representatives can be exempt from having to register in a State if the IAR has no office in the State and does not direct business to:
[A] More than 5 clients [B] More than 6 clients [C] More than 7 clients [D] More than 10 clients

Answer: A If an IAR has no office but has more than 5 clients in a State, the IAR must register in that State. Institutional investors and officers of the IA are not counted when determining the number of clients the IAR has in a State.

Under the Uniform Securities Act, a firm with its only office in State A that offers and sells securities exclusively to a registered investment company in State B:
[A] Must register as a broker-dealer in State B. [B] Is exempt from registration as a broker-dealer in State B. [C] Is exempt from registration as a broker-dealer in State B because it only has one client in State B. [D] Is exempt from registration as a broker-dealer in State B because it does not have an office in State B.

Answer: B Under the USA, it is unlawful for a firm to transact business in a state as a broker-dealer unless it is registered in the state or exempt from registration. The exemption applies to broker-dealers who sell exclusively to sophisticated institutional investors including registered investment companies.

When filing an application to become an Investment Adviser, which of the following items is NOT required under the Uniform Securities Act?
[A] The IA's proposed method of doing business [B] The qualifications of the IA's partners, officers, and directors [C] A bond which surpasses the requirements of the IA's principal office's requirements [D] A Consent to Service of Process

Answer: C No bond may be required of any registrant whose net capital, or, in the case of an investment adviser whose minimum financial requirements, which may be defined by rule, exceeds the amounts required by the Administrator [Sec 202(f)].

Which of the following securities are required to be registered under the Securities Act of 1933?

Which of the following is subject to the registration requirements of the Securities Act of 1933 quizlet?

Which of the following is regulated by the Securities Act of 1933 quizlet?

Which of the following is not an exempt security under the Securities Act of 1933 quizlet?