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Question 1 of 10
1. Question
Which of the following statements is true regarding Section 15A of the Securities Exchange Act of 1934?
Correct
Section 15A of the Securities Exchange Act of 1934 established the NASD (now FINRA). As stated by FINRA, their mission statement is as follows: “FINRA is dedicated to investor protection and market integrity through effective and efficient regulation of the securities industry.” FINRA is the largest independent regulator of the financial markets and serves a number of purposes including protecting investors
Incorrect
Section 15A of the Securities Exchange Act of 1934 established the NASD (now FINRA). As stated by FINRA, their mission statement is as follows: “FINRA is dedicated to investor protection and market integrity through effective and efficient regulation of the securities industry.” FINRA is the largest independent regulator of the financial markets and serves a number of purposes including protecting investors
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Question 2 of 10
2. Question
Which of the following statements is false regarding Section 15A of the Securities Exchange Act of 1934?
Correct
FINRA enforces rules and laws through its ability to bar individuals from association with member firms, to suspend brokers from association with member firms, and to levy fines and order restitution in cases of significant financial loss as a result of fraud or unethical sales practices.
Incorrect
FINRA enforces rules and laws through its ability to bar individuals from association with member firms, to suspend brokers from association with member firms, and to levy fines and order restitution in cases of significant financial loss as a result of fraud or unethical sales practices.
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Question 3 of 10
3. Question
Which of the following statements is true regarding The Investment Advisers Act of 1940?
Correct
The Investment Advisers Act of 1940 is intended to provide additional regulation for investment advisers, as such advisers are considered to provide advice and counsel through means of interstate commerce, the advice and counsel of such companies typically relates to the purchase and sale of securities on a national securities exchange or through the Federal Reserve system, and the volume of such transactions is significant enough to have a direct impact on interstate commerce, national securities exchange, the national banking system and the national economy.
Incorrect
The Investment Advisers Act of 1940 is intended to provide additional regulation for investment advisers, as such advisers are considered to provide advice and counsel through means of interstate commerce, the advice and counsel of such companies typically relates to the purchase and sale of securities on a national securities exchange or through the Federal Reserve system, and the volume of such transactions is significant enough to have a direct impact on interstate commerce, national securities exchange, the national banking system and the national economy.
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Question 4 of 10
4. Question
Which of the following statements is true regarding Investment adviser?
Correct
Investment adviser
Under the Investment Advisers Act of 1940, “investment adviser” is defined as “any person who, for compensation, engages in the business of advising others, either directly or through publications or writings, as to the value of securities or as to the advisability of investing in, purchasing, or selling securities, or who, for compensation and as part of a regular business, issues or promulgates analyses or reports concerning securities.”Incorrect
Investment adviser
Under the Investment Advisers Act of 1940, “investment adviser” is defined as “any person who, for compensation, engages in the business of advising others, either directly or through publications or writings, as to the value of securities or as to the advisability of investing in, purchasing, or selling securities, or who, for compensation and as part of a regular business, issues or promulgates analyses or reports concerning securities.” -
Question 5 of 10
5. Question
Which of the following statements is not included in the list?
Correct
Investment adviser’s definition does not include:
1. A bank or bank-holding company
2. Any lawyer, accountant, engineer, or teacher whose performance of investment services is incidental to his professional practice
3. Any broker or dealer, provided that the services performed are incidental to the regular business as a broker or dealer and from which the broker or
dealer receives no special compensation
4. The publishers of newspapers, news magazines, or business and financial publications
5. Those whose advice only concerns securities that are direct obligations of the United States
6. Any nationally recognized statistical rating organization
7. Any family office
8. Anyone else as designated by the Securities Exchange CommissionIncorrect
Investment adviser’s definition does not include:
1. A bank or bank-holding company
2. Any lawyer, accountant, engineer, or teacher whose performance of investment services is incidental to his professional practice
3. Any broker or dealer, provided that the services performed are incidental to the regular business as a broker or dealer and from which the broker or
dealer receives no special compensation
4. The publishers of newspapers, news magazines, or business and financial publications
5. Those whose advice only concerns securities that are direct obligations of the United States
6. Any nationally recognized statistical rating organization
7. Any family office
8. Anyone else as designated by the Securities Exchange Commission -
Question 6 of 10
6. Question
Which of the following statements is true regarding person associated with an investment adviser?
Correct
According to the Investment Advisers Act of 1940, person associated with an investment adviser shall refer to “any partner, officer, or director of such
investment adviser (or any person performing similar functions), or any person directly or indirectly controlling or controlled by such investment adviser, including any employee of such investment adviser.”Incorrect
According to the Investment Advisers Act of 1940, person associated with an investment adviser shall refer to “any partner, officer, or director of such
investment adviser (or any person performing similar functions), or any person directly or indirectly controlling or controlled by such investment adviser, including any employee of such investment adviser.” -
Question 7 of 10
7. Question
Which of the following statements is true regarding Person associated with an investment adviser?
Correct
Person associated with an investment adviser
It is important to note that those employees of an investment adviser who serve in only clerical or ministerial roles are not considered to be persons associated with an investment adviser. The ability to determine who is “associated” under this regulation is important because it is that distinction that determines an individual’s requirements under the Act and the potential civil and criminal penalties one could face as a result of a violation of the
Act.Incorrect
Person associated with an investment adviser
It is important to note that those employees of an investment adviser who serve in only clerical or ministerial roles are not considered to be persons associated with an investment adviser. The ability to determine who is “associated” under this regulation is important because it is that distinction that determines an individual’s requirements under the Act and the potential civil and criminal penalties one could face as a result of a violation of the
Act. -
Question 8 of 10
8. Question
Which of the following statements is false regarding registering with the Securities Exchange Commission?
Correct
In order to register with the Securities Exchange Commission as an investment adviser, one must file the following information:
1. The name and form of organization under which the investment adviser engages or intends to engage in business
2. The name of the state under which the investment adviser is organized
3. The location of the principal office and branch locations
4. The education and past and present business affiliations of all partners, directors, and officers
5. The nature of business of the investment adviserIncorrect
In order to register with the Securities Exchange Commission as an investment adviser, one must file the following information:
1. The name and form of organization under which the investment adviser engages or intends to engage in business
2. The name of the state under which the investment adviser is organized
3. The location of the principal office and branch locations
4. The education and past and present business affiliations of all partners, directors, and officers
5. The nature of business of the investment adviser -
Question 9 of 10
9. Question
Which of the following statements is true regarding The Investment Advisers Act of 1940?
Correct
Companies exempt from registration
The Investment Advisers Act of 1940 provides for exemption from registration for a few certain types of companies. For example, investment advisers that provide advice solely to venture capital funds are required to be registered under the Act. Additionally, investment advisers to private funds with less than $150 million assets under management are also exempt from registration.Incorrect
Companies exempt from registration
The Investment Advisers Act of 1940 provides for exemption from registration for a few certain types of companies. For example, investment advisers that provide advice solely to venture capital funds are required to be registered under the Act. Additionally, investment advisers to private funds with less than $150 million assets under management are also exempt from registration. -
Question 10 of 10
10. Question
Which of the following statements is true regarding Impact of Securities Act of 1933 on marketing and prospecting regulations?
Correct
The Securities Act of 1933, which is also sometimes known as the “truth in securities” act, was designed with two objectives in mind: (i) that investors are provided with all relevant information about any securities that are offered for sale and (ii) to prohibit fraudulent activities throughout the marketing and sale of securities.
Incorrect
The Securities Act of 1933, which is also sometimes known as the “truth in securities” act, was designed with two objectives in mind: (i) that investors are provided with all relevant information about any securities that are offered for sale and (ii) to prohibit fraudulent activities throughout the marketing and sale of securities.