Chapter 5 Part 5 Flashcards Preview

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Flashcards in Chapter 5 Part 5 Deck (15):
1

An adviser excluded from the definition

would never be required to register

2

an adviser who is exempt from registration

would customarily be required to register if it were not for the exemption

3

There are two situations in which a person who meets the definition of an investment adviser under the USA will be considered exempt from registration. The first exemption is

The adviser has no place of business in the state and the adviser's only clients are institutional investors AND The adviser has no place of business in the state, and the adviser does not direct communications to more than five noninstitutional clients in the state within 12 consecutive months. this is considered the de mininis exception for investment advisers

4

Institutional investors include

investment companies, other investment advisers, bds, banks, trust companies, savings and loan associations, insurance companies, employee benefits plans with at least $1,000,000 of assets, government entities, or other institutional investors

5

There is no de minimis exemption for

"broker--Oealers. If a broker--Oealer
has no office in a state, but intends to do business with noninstitutional (retail) clients in that state, it must be registered regardless of the number of clients"

6

an investment adviser representative (iAR) is a

nonclerical employee of an investment adviser who manages accounts, provides advice to clients, solicits advisory services, or supervises all employees who perform these functions

7

The registration of an investment adviser constitutes the automatic registration of

a partner, officer, or director as an investment adviser representative if they were with the firm at the time of the firm's initial registration

8

A representative's registration is effective only during the time the individual is

employed by a registered investment adviser.

9

When the representative's association with the investment adviser begins or ends, the Administrator must be

notified by the investment adviser

10

In order to register with a state, an investrnent adviser representative must

File an application, File a Consent to Service of Process, Pay a filing fee

11

An iAR will be required to complete Form

U4, which is filed by the investment adviser through the iARD system. Upon separation or termination, the IA will file Form U5 and notify the state Administrator

12

the iar applicants may also need to pass

an oral or written examination. However, simply passing an examination is not sufficient for registration. Applicants may not transact business in a state until all required items are filed and registration is granted by the Administrator

13

If the Administrator finds it appropriate, the examination may be

waived for certain categories of persons.

14

lnvestment adviser representatives of state-registered investment advisers are exempt from registration in any state where

They have no place of business, and They do not direct solicitations to more than five noninstitutional clients who are residents of the state within 12 consecutive months

15

The previous exemption is known as the de minimis exemption

iAs and IARs are afforded the same exemptions

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