Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
40 Cards in this Set
- Front
- Back
|
Under USA, agents registrations expire when? In actual practice? |
every December 31, unless renewed In actual practice it may vary by state |
|
|
In order for a sale to occur what must there be? What does a merger qualify as? Gifts? |
some financial consideration Shares are exchanged without any payment of funds...so no sale Gifts of assessable stock are considered a sale NON assessable stocks are not considered a sale |
|
|
What is the most important aspect when determining what securities to recommend to any client |
Suitability |
|
|
Prior to the entry of a final order, what must the administrator do? |
- Provide appropriate prior notice to the registrant - provide the opportunity for a hearing -present findings of fact and conclusions of law |
|
|
Under the USA, what does the term Guaranteed mean? |
Interest, principle, or dividends are guaranteed by someone other than the issuer |
|
|
What is the legal framework that the United Securities Act operates within? |
Not an actually law of any state or territory Model Legislation that states use as a guide in drafting their own securities laws... Those laws give power to state administrator for enforcement/administration |
|
|
What is cause for an Administrator to revoke an advisors registration |
A conviction of a felony |
|
|
When is the Administrators authority in regards to Cease and Desist orders |
They can provide prior notice and hearing if they like, but dont have to (summarily)
There is no time period associated with the order |
|
|
What situations would you revoke as advisors registration? What situations would you cancel it? |
Revoked - Committed a felony or participated in unethical business practices Canceled - found mentally incompetent, cannot be located, no longer in business. |
|
|
How long are Registration Statements usually effective for from the effective date, during which the registration cannot be withdrawn. |
12 months - you cant withdraw your registration during this period if any of the securities of the issuer of the same class are still outstanding |
|
|
What must Federal Covered Securities possibly be required to do if offered for sale in a particular state |
Paying a filing fee Providing consent to service of progress Submitting copies of any and all documentation filed with the SEC |
|
|
How do federal covered securities register with state security admins under the ICA of 1940? What about non federal covered securities? |
Notice Filing - primarily applies to securities from Investment companies aka mutual funds and federal covered securities Non Fed Cov Sec's are registered with the states by either coordination or qualification, unless exempt. |
|
|
What steps must an Administrator take to suspend/postpon an agent's registration |
Upon entry of an order to suspend postpone registration pending final determination, Admin Promptly notify the applicant/employer this has been entered, reasons why, 15 days after written request recieved max time for a hearing |
|
|
Under the USA, Federal covered securities include what? |
Registered with the SEC, but also those exempt from registration like government and muni bonds. Inv company sec. not required to be reg. in states under USA, but states may require a notice filing. |
|
|
What are 3 things considered sales 2 things not considered sales |
Sales - Contracts to sell, gifts of assesable stock, sale of shares aquired as part of a stock dividend Not Sales- Security pledged for a loan, stock dividend |
|
|
What kind of transaction exemptions can a admin revoke/deny? |
Any transaction exemption except for those involving a federal covered security. |
|
|
What kind of security exemptions can an admin revoke/deny |
securities issued by non profit organizations and investment contracts of employee benefit plans. |
|
|
When is a registration effective What happens when you file an amendment |
Registration is effective at noon 30 days after being filed, providing the registration is not in the process of denial filing an amendment resets that clock by 30 days |
|
|
What kind of transaction is a sale of a security to a financial institution? |
Exempt |
|
|
During an exempt transaction, does the security need to be registered in the state in which it is sold in? |
No |
|
|
What must qualities are necessary for an entity to be considred a broker dealer in a state |
transaction must not be exempt from registration and broker dealer must have office in the state. |
|
|
When does registration by coordination become effective? |
At the same time it is released (made effective) by the SEC |
|
|
Who has the power to offer emergency injunctions to prevent violations of the USA? Who does not have this power? |
Injunctions are judicial orders that can only be issued by a court of law, Not by an administrative agency such as state Admin |
|
|
What can an Admin under USA do to the proceeds of an issue? |
Require them to be held in escrow until the issuer receives a certain percentage of the sale of the securities offered. |
|
|
What can an admin do to uphold public interest and combat excessive commisions? |
Admin can suspend the registration of a security if the suspensio is in the public interest and the offering has excessive commisions |
|
|
What can an Admin of a different state ask another Admin to do to enforce violations that occured in a different state |
Enforce subpoenas in the state at their request for alleged violations that occurred in another state. |
|
|
For a indvidual to solicit clients for an investment advisor, what must they do? |
they are considered an employee requiring proper licensing as registration as an Investment Advisor Representative of an Investment Advisor |
|
|
An admin can bring a case against an agent and force him to |
pay back a client |
|
|
What is the basic definition of a promissory note? |
two party agreement representing a promise to repay a specific sum on a specified date that, if it meets certain requirements, is exempt from registration.. |
|
|
when a broker dealer has its registration revoked, what happens to it's agents? |
They all have their registrations revoked as well, as an agent has to be associated with a regiesterd B/D to maintain his license. |
|
|
TRICKED! When looking at discretionary sales, make sure you double check the customers order and what the agent actually executed for what? |
To make sure they line up! |
|
|
When can an individual act as agent for more than one B/D? |
When the administrator by rule or order authorizes such employment. |
|
|
To accept an order from a client, what must a an agent be? Unless what? |
Registered in the state in which the client is domiciled... unless the agent is representing a B/D that is exempt from registering in that state |
|
|
Most important statements in USA It is unlawful for any person to offer or sell any securities in this state unless: |
1. it is registered under the act 2. The security or transaction is exempted under the act 3. it is a federal covered security |
|
|
What are the major categories of Federal covered securities ( securities covered by federeal securities laws) which therefore cannot be regulated by state security admins |
- Issued by open/closed ended investment companies, UIT's, FACC, reg under the investment comp act of 1940 -US fed gov issued or muni issued (unless muni issuer located in same state offered in) -Listed on NYSE, CSE, NASDAW, other exchanges(plus any sec equal/senior aka rights/warrants/bonds/pref stock -Sec offered pursuant to provisions of Rule 506(b) or 506(c) of Reg D (qualifying under the provate placement transaction exemption) |
|
|
What are the Exempt securities |
-US/foreign gov and muni and federal covered - Depository institutions - Public Utility - Employee benefit plans - Non profits - Cooperatives - Insurance comapny securities - Certain Money market(Bankers acceptances and commercial paper common) |
|
|
What is the exempt securities acronym? what does it stand for |
UDPENCIC, you dont put enough negative commercials in circulation US Gov, Depository, Public Utility, Employe benefit plan, Non profits, Cooperatives, Insurance company, certain money markets |
|
|
What is an Isolated non issuer itransaction? |
Secondary transactions, whether effect through / or not, that occur very infrequently. Usually do not involve securities professionals one individual selling to another where issuer receives no proceeds and trading is not part of a regular practice |
|
|
What is an unsolicited brokerage transaction |
Inititiated by the client. Most common, Admin may require client to acknowledge in writing the sale was unsolicted. |
|
|
Underwriter transactions Bankruptcy/guardian/conservator transactions |
-Transactions between the issuer and underwriter aka a firm commitment underwriting or between underwriters themselves. - |
