66 - Missed Practice Exam Questions
With Complete Answers
A
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LA
C
O
D
,KAPCO Advisers is registered as an IA with the SEC. Their only office is in New Jersey and all
IARs are registered there. IAR Claire has 10 clients who reside in Ohio; IAR Sean has 6 clients
A
who live in Kentucky; and IAR Felicia has 3 clients who are Georgia residents. In addition,
Felicia conducts a quarterly presentation at the Augusta, Georgia National Golf Club where she
discusses current market developments. The seminar is restricted to club members only. Which
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of the following is CORRECT?
A)
Sean must register in Kentucky.
B)
C)
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Claire must register in Ohio.
Felicia must register in Georgia.
LA
D)
Because all 3 are registered in the state where KAPCO maintains its principal office, no further
registrations are necessary for these IARs. - ANS C)
Felicia must register in Georgia.
Under Section 203A of the Investment Advisers Act of 1940, any IAR with a federal covered
adviser who has no place of business in a state is not required to register in that state even
C
when the number of clients they have in a state exceeds the de minimis level. Holding a public
seminar on a quarterly basis in the same location would be considered having a place of
business in Georgia (even though attendance is limited to club members only—they are still
members of the general public).
O
The Uniform Securities Act provides for a number of cases where an investment adviser
representative is not defined as such in a specific state. One of those cases is when
D
A)
the individual represents a federal covered investment adviser and has two retail clients in a
state in which she has no place of business.
B)
the individual is registered in State A as a representative of a state-registered adviser, has no
place of business in any other state, and has fewer than six retail clients in State B.
C)
the individual is registered in State A as a representative of a state-registered adviser, has no
place of business in any other state, and has six or fewer retail clients in State B.
D)
,the individual maintains an office in State B, but his only clients in that state are institutions. -
ANS B)
the individual is registered in State A as a representative of a state-registered adviser, has no
place of business in any other state, and has fewer than six retail clients in State B.
Those individuals representing a state-registered investment adviser (IA) can take advantage of
the de minimis exemption. That is, if the individual has no place of business in a state and
conducts business with no more than five retail clients in the state, registration is not required.
Be sure you understand that "no more than five," "fewer than six," and "five or fewer" mean the
same thing. Six or fewer is too many. The representative of the covered IA would not have to
register; but that is not part of the USA, it is part of the federal law. There are never any
A
exceptions for those with a place of business in the state.
Because of failing economic conditions, KAPCO Advisers, an adviser with slightly less than
R
$120 million in assets under management, lays off a registered investment adviser
representative. In this case, who would notify the state Administrator of the termination?
A)
The IAR's new employer
B)
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The IAR
C)
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Both KAPCO and the IAR
D)
KAPCO Advisers - ANS B)
The IAR
With more than $110 million in assets under management, KAPCO is a federal covered adviser.
C
In that case, the IAR is the one who notifies the Administrator of being terminated
An individual with a place of business in State A manages client assets on behalf of a covered
investment adviser. This individual wishes to expand his client base by working 1 day per week
O
out of the firm's office in State B. Which of the following actions must this individual take to
practice within that particular state?
A)
D
Register as an investment adviser representative in State B
B)
Become licensed as a broker-dealer
C)
Comply with the notice filing requirements of the state
D)
Pass an oral or written examination - ANS A)
Register as an investment adviser representative in State B
, Individuals managing client assets while employed by federal covered investment advisers must
register as investment adviser representatives if they maintain a place of business in the state.
Working on a regular schedule in the firm's office in State B, even if only once per week,
constitutes maintaining a place of business in the state. Because this individual is already
registered in State A, it is not necessary to pass another exam to become registered in another
state. It is the investment adviser who may be required to notice file with the Administrator.
Which of the following statements are TRUE?
A)
When an investment adviser representative begins or terminates employment with a
state-registered investment adviser, only the investment adviser representative must notify the
A
Administrator.
B)
When an investment adviser representative begins or terminates employment with a
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state-registered investment adviser, only the investment adviser must notify the Administrator.
C)
When an investment adviser representative or a registered agent of a broker-dealer terminates
employment, notice must be given to the Securities and Exchange Commission.
D)
U
When an investment adviser representative begins or terminates employment with a federal
covered adviser, only the investment adviser must notify the Administrator. - ANS
LA
investment adviser representative must notify the Administrator.
B)
When an investment adviser representative begins or terminates employment with a
state-registered investment adviser, only the investment adviser must notify the Administrator.
All of the following must be specified in the state registration statement of the security EXCEPT
C
A)
all other states where the security is currently registered or will be registered
B)
a stop order from any other state that affects the offering of the security within that state
O
C)
the total amount of security that will be offered in this state
D)
D
the total amount of the security that will be offered in each state - ANS D)
the total amount of the security that will be offered in each state
Which of the following would be considered an issuer transaction as defined in the Uniform
Securities Act?
A)
Ken, the largest shareholder in ABC Corporation, sells 100,000 shares in a registered
secondary transaction.
B)
With Complete Answers
A
R
U
LA
C
O
D
,KAPCO Advisers is registered as an IA with the SEC. Their only office is in New Jersey and all
IARs are registered there. IAR Claire has 10 clients who reside in Ohio; IAR Sean has 6 clients
A
who live in Kentucky; and IAR Felicia has 3 clients who are Georgia residents. In addition,
Felicia conducts a quarterly presentation at the Augusta, Georgia National Golf Club where she
discusses current market developments. The seminar is restricted to club members only. Which
R
of the following is CORRECT?
A)
Sean must register in Kentucky.
B)
C)
U
Claire must register in Ohio.
Felicia must register in Georgia.
LA
D)
Because all 3 are registered in the state where KAPCO maintains its principal office, no further
registrations are necessary for these IARs. - ANS C)
Felicia must register in Georgia.
Under Section 203A of the Investment Advisers Act of 1940, any IAR with a federal covered
adviser who has no place of business in a state is not required to register in that state even
C
when the number of clients they have in a state exceeds the de minimis level. Holding a public
seminar on a quarterly basis in the same location would be considered having a place of
business in Georgia (even though attendance is limited to club members only—they are still
members of the general public).
O
The Uniform Securities Act provides for a number of cases where an investment adviser
representative is not defined as such in a specific state. One of those cases is when
D
A)
the individual represents a federal covered investment adviser and has two retail clients in a
state in which she has no place of business.
B)
the individual is registered in State A as a representative of a state-registered adviser, has no
place of business in any other state, and has fewer than six retail clients in State B.
C)
the individual is registered in State A as a representative of a state-registered adviser, has no
place of business in any other state, and has six or fewer retail clients in State B.
D)
,the individual maintains an office in State B, but his only clients in that state are institutions. -
ANS B)
the individual is registered in State A as a representative of a state-registered adviser, has no
place of business in any other state, and has fewer than six retail clients in State B.
Those individuals representing a state-registered investment adviser (IA) can take advantage of
the de minimis exemption. That is, if the individual has no place of business in a state and
conducts business with no more than five retail clients in the state, registration is not required.
Be sure you understand that "no more than five," "fewer than six," and "five or fewer" mean the
same thing. Six or fewer is too many. The representative of the covered IA would not have to
register; but that is not part of the USA, it is part of the federal law. There are never any
A
exceptions for those with a place of business in the state.
Because of failing economic conditions, KAPCO Advisers, an adviser with slightly less than
R
$120 million in assets under management, lays off a registered investment adviser
representative. In this case, who would notify the state Administrator of the termination?
A)
The IAR's new employer
B)
U
The IAR
C)
LA
Both KAPCO and the IAR
D)
KAPCO Advisers - ANS B)
The IAR
With more than $110 million in assets under management, KAPCO is a federal covered adviser.
C
In that case, the IAR is the one who notifies the Administrator of being terminated
An individual with a place of business in State A manages client assets on behalf of a covered
investment adviser. This individual wishes to expand his client base by working 1 day per week
O
out of the firm's office in State B. Which of the following actions must this individual take to
practice within that particular state?
A)
D
Register as an investment adviser representative in State B
B)
Become licensed as a broker-dealer
C)
Comply with the notice filing requirements of the state
D)
Pass an oral or written examination - ANS A)
Register as an investment adviser representative in State B
, Individuals managing client assets while employed by federal covered investment advisers must
register as investment adviser representatives if they maintain a place of business in the state.
Working on a regular schedule in the firm's office in State B, even if only once per week,
constitutes maintaining a place of business in the state. Because this individual is already
registered in State A, it is not necessary to pass another exam to become registered in another
state. It is the investment adviser who may be required to notice file with the Administrator.
Which of the following statements are TRUE?
A)
When an investment adviser representative begins or terminates employment with a
state-registered investment adviser, only the investment adviser representative must notify the
A
Administrator.
B)
When an investment adviser representative begins or terminates employment with a
R
state-registered investment adviser, only the investment adviser must notify the Administrator.
C)
When an investment adviser representative or a registered agent of a broker-dealer terminates
employment, notice must be given to the Securities and Exchange Commission.
D)
U
When an investment adviser representative begins or terminates employment with a federal
covered adviser, only the investment adviser must notify the Administrator. - ANS
LA
investment adviser representative must notify the Administrator.
B)
When an investment adviser representative begins or terminates employment with a
state-registered investment adviser, only the investment adviser must notify the Administrator.
All of the following must be specified in the state registration statement of the security EXCEPT
C
A)
all other states where the security is currently registered or will be registered
B)
a stop order from any other state that affects the offering of the security within that state
O
C)
the total amount of security that will be offered in this state
D)
D
the total amount of the security that will be offered in each state - ANS D)
the total amount of the security that will be offered in each state
Which of the following would be considered an issuer transaction as defined in the Uniform
Securities Act?
A)
Ken, the largest shareholder in ABC Corporation, sells 100,000 shares in a registered
secondary transaction.
B)
