Series65 MOD 1 USA

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Series65 MOD 1 USA
2014-12-23 21:29:32

USA, What are securities, exceptions
Show Answers:

  1. Blue Sky Laws = ??
    • State Laws
    • USA is "Model Law"
  2. Nat Securities Markets Imprvmnt Act 1996 NSMIA did what?
    • Limited Powers of State
    • Fed Law Supercedes State
    • Regulates FED covered Securities
    • avoids redundancy
  3. Securities include:
    • Stocks: Voting Trust Certificates, Treasury Stocks and Rightsor Warrants to purchase stock
    • Bonds: Debentures, notes, commercial paper
    • Certificates of deposits for a Security
    • Invesment Company issues
    • Variable Life/Annuities
    • Interests in Profits sharing (mines,oil,gas)
    • REITS
    • Options & Commodity Options (not commodity futures)
    • PRE-Org Certs/subscript agreements
    • Whiskey warehouse receipts
  4. Not A Security:
    • Commodity Futures
    • Drilling Leases
    • Keogh Plans
    • IRA Plans
    • Real Estate
  5. What is a Derivative?
    Instrument/Contract whose value is based on the performance of an underlying financial asset, including:
  6. Derivatives include:
    • Options (puts/calls)
    • Futures
    • Forward Contracts
    • CMOs
  7. What are Futures?
    agreement to buy specific amount of a commodity, currency or instrument at specific price at a future date
  8. Are REITs and UITs Derivatives?
  9. What is considered a person?
    • 1. An individual
    • 2. Corporation
    • 3. Partnership
    • 4. Gvmnt or Political Subdivision
  10. Issuers = The depositor or Manager of the Trust
    Only for Certificates of Deposits, Voting-Trust Certs or Collateral-Trust Certificates
  11. for certificates of Interst or Participation in Oil, Gas, mining (issuer?)
    There is no ISSUER
  12. What is considered an "Issuer Transaction"?
    Issuer directly/indirectly receives proceeds or benefits from the sale/gifting of their securities. i.e. first time securities are ever sold, given or donated to anyone
  13. Examples of Issuer Transactions
    • 1. Mutual funsd sold to investors
    • 2. Newly offered shares of stock to investor (through U/W)
    • 3. New Shares of existing company
    • Company gives Treasury Stock to employees or employees pension plans
  14. NON-issuer Transactions
    • 2ndary Market transactions
    • Only investor who sell receives proceeds of sale
  15. Examples of NON-Issuer transactions
    • Investor to Investor through Exchange
    • Investors through private transaction
    • B/D sells inventory to Investor (dealer transaction)
    • Mutual Fund sells shares of NASDAQ stock to a Pension fund
  16. Exempt means
    • Security is Exempt from State registration
    • The Transaction is considered Exempt
  17. NON-Exempt means
    The Security and all Advertising regarding the Security must be registered with the ADMIN in the state which the Offer/Transaction Occurs
  18. Define Offer to Sell
    Any attempt to Dispose of a Security for Value
  19. Examples of Offers to Sell
    • Sending a Prospectus to a Prospective client
    • Calling/Soliciting a client to purchase
    • Publishing a Tombstone Ad in a newspaper
    • Mailing offer to Client in another state
  20. Offers made by phone or mail from different state, are subject to:
    Laws of both states
  21. a SALE of Security is considered
    Disposition of a security or interest in a security for Value
  22. Not Considered an Offer/Sale
    • Loans
    • Stock Dividends
    • Securities acquired through Merger, Consolidation or Reorganization (BK)
    • Gifts of Securities
  23. Assessable Security
    A type of stock that companies issued to investors at a discount to its face value in exchange for the right to come back for more money at a later date.
  24. Define Broker/Dealer
    Any Person (Firm) engaged in the business of Effecting Trades in Securities for the Accounts of others or themselves
  25. A Person is NOT a B/D if it is:
    • an Agent
    • An Issuer
    • Bank, Savings Institution or Trust Company
    • ** A B/D that has NO PLACE OF BUSINESS in the State and Transacts Exclusively with:
    • Issuers, Other B/D, or Institutional Investors
    • Non-residents who are existing clients
  26. Define AGENT
    Any Individual who Represents a B/D or Issuer in Effecting or Attempting to Effect purchases or Sales of Securities

    • Broker/Dealer Agents
    • Issuer Agents

    • Agents Solicit Purchases & Sales of Securities
    • Agents do not have to be Commissioned to be defined as Agents
  27. Who is NOT considered B/D agents
    Partners, Officers, Board Members UNLESS they are Effecting Transactions
  28. Individual is not an Agent in a State if
    • Only Executing Transactions for clients Temporarily in that state for<30days
    • A Client moves to another state (60days)
    • Conditions:
    • Not eligible to register with that state
    • Registered with SRO and at least one state
    • B/D Must be registered with that State
  29. An Individual  representing an Issuer is NOT defined as an Agent if they effecting:
    • Transactions in Exempt Securities
    • Exempt Transactions
    • Transactions in FED covered Securities
    • Transactions with employees of the issuer (no commissions)
  30. If representing ISSUER, not and agent if Transactions involve exempt securities:
    • US Gvmnt securities
    • Canadian Gvmnt Securities
    • Muni Securities
    • Shares of Stock of Financial Securities
    • Short Term Debt (<9mnths) and >$50k, rated A or above
    • Investment Contracts (options to buy) in connection to Employee Stock Purchase, Savings, Pension
  31. If representing ISSUER, not and agent if Transactions involve Exempt Transactions:
    • Transactions between Issuer and U/W
    • Transactions in Bonds secured by Real Estate
    • Offers/Sales to Institutional Investors
    • Private Placements (<10 people) no commissions
    • Offers/Sales of PreOrganization Certs (no commissions)
  32. If representing ISSUER, not and agent if Transactions with Employees
    • Must Represent the issuer
    • No Compensation
    • If representing B/D for an Issuer, must be registered
  33. An Investment Adviser is any Person compensated for:
    • 1. Providing Investment Advice
    • 2. Publishes Security Report for Individual Investors as part of a Regular Business
    • 3. Advertising themselves as Financial Planners & Providing Investment Advisory Services
    • 4. Pension Plan Consultants
    • 5. Acting as Agents for Professional Athletes and Entertainers, and Advising their Clients about Investing
  34. Who is NOT an Investment Adviser
    • Investment Adviser Representative (IAR)
    • A Bank, Savings Institution or Trust Company
    • A Lawyer, Accountant, Teacher or Engineer
    • A Broker-Dealer or its Agents
    • A Publisher
    • A Federal Covered Adviser
  35. IAs with AUM of $100 Million or More are
    Federal Covered Investment Advisers
  36. IAs with AUM less than $25 Million
    Must register in the State
  37. Who is considered an Investment Adviser Representative
    Any Partner, Officer, Director of or other Individual Employed by or Associated with an Investment Adviser that is Registered or Required to be Registered under this Act OR Who has a Place of Business Located in the State and is Employed or Associated with a Federal Covered Adviser AND who does Any of the Following:
  38. Continued
    • Makes Any Recommendations or
    • Otherwise Renders Advice Regarding Securities,Manages Accounts or Portfolios of
    • Clients, Determines which Recommendation or
    • Advice Regarding Securities should be Given, Solicits, Offers or Negotiates for
    • the Sale of or Sells Investment Advisory Services or Supervises employees who perform any of the foregoing.
  39. A Solicitor is a Person who..
    • Introduces a Client to an Investment Adviser.
    • The Solicitor is Usually Paid a Fee
    • Fees can be Paid in Cash, Check, Money order, or in Any Manner Requested Other than Sharing in Advisory Fees
  40. With a Solicitor, what are the requirements for giving information
    • The Client Must Agree, in writing, Sign and Date a Disclosure Document for the Solicitor
    • The Client Must Acknowledge that Fees will be Paid by the Adviser to the Solicitor
    • The Solicitor and the IA Must Maintain Copies of the Signed Agreement between them
  41. What are the Solicitors Responsibility with an IA
    • Disclose that Fees will be Paid
    • Provide Description of the Fees
    • Disclose Compensation the Client will Pay, if any, in Addition to the Advisory Fees
  42. Registration Requirements of Solicitor
    • Uniform Securities Act:
    • Solicitors are defined as IARs
    • Must be Registered
    • Investment Adviser Act of 1940:
    • If the Solicitor is an IAR, Must be Registered
    • If the Solicitor is a Third Party Solicitor and is NOT Supervised by the IA, Solicitor Must be Registered in the State that has Jurisdiction over the Solicitor
    • If the Solicitor is Supervised, but is Not an IAR, No Qualification or Registration is Required
  43. A Federal Covered Investment Adviser is an IA which must Register with SEC and:
    • has $30,000,000 ($100 million) or More in Assets Under Management ,or
    • An IA to a Registered Investment Company, or
    • A Consultant to Pension Plans of $50 million ($200 million), or Advisors of Nationally recognized Statistical Rating Organizations