Unit 7

Question 1

For agency cross trades to be executed, the adviser must do these 4 things:

Answer 1

1. Provide a prospective client with a written disclosure regarding any potential conflicts that may arise
2. Obtain written, revocable client consent
3. Send the client a written confirmation which provides the date and details of the trade
4. At least annually, send each client a summary of the adviser’s agency cross activity

Question 2

According to the Investment Advisers Act of 1940, access persons must submit their personal security holdings reports by no later than ___ days after becoming an access person; then at least every ___ months thereafter.

Answer 2

10, 12

Question 3

For IPOs of securities that will begin trading on an exchange (either the NYSE or Nasdaq), the obligation to provide a prospectus continues for __ days after the effective date.

Answer 3

25

Question 4

For secondary (i.e., follow-on) offerings of securities that will trade over-the-counter (i.e., not be listed), broker-dealers must provide a prospectus for __ days.

Answer 4

40

Question 5

If a broker-dealer is underwriting an IPO that will not be exchange-listed, it must deliver a prospectus for up to __ days after the IPO.

Answer 5

90

Question 6

An employee of an investment adviser has recently donated $500 to a candidate’s political campaign. What are the consequences under the pay-to-play rule of the Investment Advisers Act?

Answer 6

The adviser is prohibited from receiving advisory fees from the elected official’s municipality for two years.

Question 7

Under the SEC’s pay-to-play rule, an employee of an investment adviser is prohibited from making a political contribution that exceeds $___ to a candidate for whom she may vote.

Answer 7

$350

Question 8

If an employee of an IA is not allowed to vote for a candidate, the employee is only able to contribute up to $____.

Answer 8

$150

Question 9

When must an access person submit a transaction report?

Answer 9

No later than 30 days after the end of each calendar quarter

Question 10

A no load-fund is a fund that assesses a 12b-1 fee of 0.25% of average _________ per year.

Answer 10

net assets

Question 11

A _________ order gives a broker the time and price discretion to seek the best price available.

Answer 11

not-held