Ch1 S2 66

Front 1

Ivestment Advisor

Back 1

FIRM
-A person who, FOR COMPENSATION, engages in the business of advising others
Key Points ABC:
1.provide Advice about securities
2.as a Business
3.for Compensation

Front 2

Exluded from the definition of an investment advisor are:

Back 2

1.Investment advisor represenative(IAR)
2.Institutions such as BANKS, savings institutions, trust companies, investment companies and other financial intermediaries, even if they charge a fee for advisory services
3.Lawyers, Accountants, Teachers, and Engineers are excluded if their advice is INCIDENTAL
4.B/Ds and their agents if the advice is incidental to their normal brokerage activities and NO extra commission are charged
5.Publishers of newspapers, magazines, newsletters who give GENERAL advice about securities which is not specific to certain clients and does not respond to specific questions from readers
6.Federal covered advisors
7.Employee benefit plans

Front 3

Investment Advisor Representative

Back 3

PEOPLE
Any individual, partner, officer,director, employee or associate of an IA who:
1.Makes recommedations of gives advice regarding ANY security(exempt or not)
2.Supervise employees who perform the above listed securities

-Would also include solicitors(salespersons and others who refer customers to IAs.

Front 4

IAR does NOT include employees who:

Back 4

1.Perform only clerical tasks such as a receptionist
2.Only solicit sales of fixed annuities

Front 5

Federal covered advisor

Back 5

Must register w the SEC only
-Exempt from state registration but may be required to file a NOTICE with the states in which 6 OR MORE clients transact business with the federal covered advisor
Includes:
1.AN advisore to a registered inv company or
2.Manages an inv portfolio of $25million or more

Front 6

Excluded from the definition of Federal Covered Advisor and therefore exempt from SEC registration are:

Back 6

1.IAs who give advice on the US govt sec only
2.Banks
3.Publishers of general advice about sec
4.Lawyers, accountants, teahers and engineers

Front 7

T or F
To be considered a FCA, the IA must actually register with the SEC. Persons who meet the federal definition but are exempt or who have failed to register with the SEC are NOT FCAs

Back 7

T

Front 8

Issuer

Back 8

Any person(in this case a company) who issues or proposed to issue and security for sale and receives the proceeds of the sale
1. A b.d can be an issuer if it was selling its own securities
2.A corp issuing certificates of interest in oil, gas, or mining titles or lease is NOT consideres to be an issuer
3.An ind inv selling stock that he or she owns to another inv would be considered to be a NON-ISSUER transaction

Front 9

Administrator

Back 9

The designated state official who administers and enforces securites regulations and the USA in a given state

Front 10

Institutional investors

Back 10

Organizations that trade large volumes of securities
Ex:Banks, ins companies, employee benefit plans, and any other persons who are designated as such by rule or order of the administrator.