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32 Cards in this Set
- Front
- Back
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What is a GRAT |
Grantor Retained Annuity Trusts (GRAT) designed to pass assets to beneficiarys (Min gift/estate tax) Assets transfer into trust, pay grantor a fixed annuity for term, assets earnings in excess of 3%(state set) are tax free at the end of term when passed to beneficiaries |
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Risk of a GRAT |
if the grantor dies during the term of the trust the remaining assets are considered part of the deceased estate |
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Under the USA, what is the caveat( and the difference between the IAA) for the regulation that requires a copy be kept of any form of cummunication with clients? |
under the IAA it is 10 or more persons that warrant a copy be kept Under USA it is 2 or more people this means that individual emails do not have to be kept in a file |
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Record retention requirements under the IAA and USA For IS's vs B/Ds |
IAA IA is 5 Years USA IA's is 5 years B/Ds is 3 |
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What is required to change Investment policy? |
A majority vote of the outstanding stock |
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What is required to enter into or renew an investment contract with an IA or a BD? |
Must be approved by a majority of non interested directors |
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Difference between the Coverdell ESA and 529 in regards to ability to fund who may the beneficiary be in a coverdell? |
Coverdell can fund education at any level 529 can only fund education at the secondary level Doesnt have to be related |
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Considerations for an LLC |
Benefits - Combines the Limited liabilities of incorporating with the Tax advantages of a partnership (Flow through of losses and income) |
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How do the different business entity owners file their taxes? |
Sole proprietors - Schedule C Members of LLCs and Shareholders of Corp S - Schedule K-1 Corporation C - Form 1120 |
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Who is the burden of proving an exemption on? |
The Issuer Unless registration was filed by someone else, in which case it would be on them |
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How are Zero Coupon corporate bonds Taxed? |
The deep discount is accreted and taxed annually |
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If registration under IAA is revoked, what is the time limit to submit an appeal and who is it submitted to? |
Filed in Federal Court and must be filed within 60 days |
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What are the executors that are exempt transactions |
executor, administrator, sheriff, marshal, guardian, trustee in bankrupcy NOT UGMA UTMA |
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when is a preorganization certificate an exempt transaction |
-no commission for soliciting subscribers # of subscribers is < 10 No payments made by any subscriber |
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Exempt Transactions
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isoalted non issuer unsolicted underwriter-issuer Executor Institutional privateplacement |
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what AUm do pensions plans neeed to qualify for exempt transaction |
1 MM AUM |
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TIC (what is the example this was used for) vs JTWROS |
When two people want to pool their assets for trading, they would open a Tenants in Common so that if one dies, the assets pass to their respective estates JTWROS, upon death assets go to survivor |
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What is the Sharpe ratio and what is the formula |
measure of the return per unit of risk taken Actual Return - Risk free rate ____________________________ standard deviation |
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reinvestment risk and the security that is least affected |
The risk of not getting similar returns on income generated coupon free fixed income |
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What act authorized the FED to regulate credit in the markets (margin requirements) |
The Securities Exchange Act of 1934 |
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Maloney Act |
Created an SRO to supervise the OTC market |
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What disclosure is not required to be signed by the client and what can you do if they refuse to sign |
The brochure continue but notify your supervisor |
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How do you recognize that a need for money is a Capital needs and not a Investment Constraint |
Capital Needs usually Mortgage/Debts, Education, Income for survivors Shown with a Specific Dollar Amount |
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Be careful about Bank wording why? |
bank HOLDING companies are not Exempt securites under bank exemption Most Bank Holding companies are listed on exchanges, and so are exempt from state registration but not Federal |
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When is you Holding period return on a bond lower than the YTM? |
When you are unable to reinvest your interest at the coupon rate |
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How are withdrawels from qualified plans taxed? |
As income tax never capital gains |
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When filing an amendment to an effective registration, what is allowed to be changed and what isnt |
CAN BE CHANGED - Shares outstanding CANNOT - Commission Public Offering Price |
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Under the USA, what surprising thing can an AGENT of a BROKER/DEALER do |
share in the profits of his clients account with client and B/Ds written approval |
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HOW do you get income from derivatives? |
You SELL them |
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What is the first thing that must be done for a B/D after recieving a written complaint from a CLient |
Promptly reply back to the client |
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What are contributions to Keogh Plans based upon |
Self employment income |
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Under the securities exchange act of 1934, how do you define government securities? |
Issued by the U.S (Federal) Government or one of it agencies State issued is a Muni |
