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51 Cards in this Set

  • Front
  • Back
B/D Info for Filing Application
-Name and Address
-Business Type
-Qualifications and business history of controlling person
-Applicant's financial condition and history
-Any injunction, administrative order, felony conviction or conviction of securities-related misdemeanor
-Details for unsatisfied judgments or liens
-If a bonding company has ever denied, paid out on, or revoked a bond
B/D Application Amendment
Any material information becomes inaccurate or outdated, file promptly (about 30 days)
B/D Consent to Service of Process
-Irrevocably appoints the Administrator as the registered person's attorney for the service of legal papers
-No renewal necessary
B/D Registration Fees
-At registration and annual renewal
-If denied/withdrawn, Admin. can retain fee
-Successor firm must file new application, but not need to pay new filing fee
B/D Effective Date
-Noon on the 30th day after filing the application
-Terminate annually on Dec. 31
-Renewal is fee payment and update application
B/D Electronic Platform for Registration
Web CRD (Central Registration Depository)
B/D Surety Bond
Required if net capital or other financial requirements are less than specified minimum amounts set by Admin
B/D Exclusions from Definition
-Banks, savings and loan companies, savings institutions, and trust companies
-Person with no business in state AND only transacts with issuers, b/ds, financial inst., institutional buyers
-Person with no business in state AND registered where maintains business and conducts business with existing non-resident clients
Agents must register if
Receive commission/compensation based on sale of securities
Agent Registration Fees
-At registration and annual renewal
-If denied/withdrawn, Admin. can retain fee
-Successor firm must file new application, but not need to pay new filing fee
Agent Effective Date
-Noon on the 30th day after filing the application
-Terminate annually on Dec. 31
-Renewal is fee payment and update application
Agent De Minimis Exemption
1. Must not be ineligible to register in the state
2. Agent's b/d must be registered in the state
3. Must be registered with a national securities association
4. Must be registered in at least one other state
Agent Registration Exception
If agent's application is pending in a state, may engage in transactions for up to 60 days with an existing client who moved into the state
Agent Electronic Platform for Registration
Web CRD (Central Registration Depository)
Agent Surety Bond
Required if net capital or other financial requirements are less than specified minimum amounts set by Admin
Agent Exemptions for Representing an Issuer
-US government securities
-Canadian or other foreign govt securities
-Municipal notes and bond
-Securities of banks, trust companies and savings institutions
-Commercial paper with an inital maturity of nine months or less
-Investment contracts fo employees (savings, profit sharing, pension, and stock purchase plans)
IA Registration Requirements
1. Providing ADVICE about securities
2. Providing these services as a BUSINESS
3. Receiving COMPENSATION for these services
IA Application Amendment
Any material information becomes inaccurate or outdated, file promptly
IA De Minimis Exemption
1. Adviser has no place of business in state AND adviser's only clients are institutional investors
2. Adviser has no place of business in state AND adviser does not direct communications to more than 5 noninstitutional clients in the state within 12 consecutive months
IA Electronic Platform for Registration
(IARD) Investment Adviser Registration Depository
IA Surety Bond Requirements
If have custody or discretionary authority over client funds or securities
IA NASAA Minimum Financial Requirements Model Rule
-Custody of clients, $35,000 at all times
-Discretionary authority, $10,000
-Prepaid fees of more than $500, 6 months or more in advance, positive net worth at all times
IA Exclusions from Definition at State Level
-Investment Adviser Representatives
-Banks, savings institutions and trust companies
-Professionals whose investment advise is incidental (lawyers, accountants, teachers, engineers)
-B/D that offer advise as part of their normal business and do not receive special compensation for advice
-Publishers of newspapers, magazines or business publications provided the advice given is impersonal
-Federal covered advisers
-Any other person designated by Admin
IAR Registration Requirements
Required if nonclerical employee of IA who manages accounts, provides advice to clients, solicits advisory services or supervises some who performs these functions
IAR Registration Process
-File an application
-File a consent to service of process
-Pay a filing fee
-Pass oral or written examination (can be waived if Admin finds appropriate)
IAR De Minimis Exemption
Exempt in state if they have no place of business AND do not directly solicit to more than 5 non-institutional clients who are residents
IAR Electronic Platform for Registration
(IARD) Investment Adviser Registration Depository
IAR Financial Requirements
Not required
One-Stop Filing System for all Federal and State Forms
(EDGAR) Securities and Exchange Commission Electronic Data Gathering, Analysis, and Retrieval system
Surety Bond Definition
-Posted by a registrant to cover the costs of possible legal action arising from violations of USA
-Maintained for three years after registrant withdrawal and cash and securities can be deposited in lieu of the bond
B/D Record Retention
3 years
IA Record Retention
5 years
Canadian B/D and Agents Registration Requirements
-Evidence of registration in Canada
-Application in form required by jurisdiction where its principal office is located in Canada
-Consent to service of process and pay any required fees
-Be a member of an SRO or stock exchange in Canada (B/D Only)
Exceptions to the Definition of a Security
-Fixed annuity
-Life insurance or an endowment policy
-Commodity futures contract
-Individual retirement account (IRA) or Keogh plan
Security Registration Exemptions
1. Security is registered under the Act
2. Transaction is exempt from registration
3. Federally covered security
Security Registration Requirements
-Amount of securities to be offered
-Other states where a registration statement has or will be filed
-Any adverse ruling entered in connection with the offering by a state regulatory authority, court, or SEC
Issuer Registration Requirements
-Issuer must be a registered under Securities Exchange Act of 1934 and have issued a class of equity held by 500 or more shareholders
-Issuer must have a total net worth of $4mm or a total net worth with a net pretax income of $2mm for at least 2 of the previous 3 years
-Issuer must have been in business for at least 36 calendar months
Security Filing Requirements
-For a period of 30 days during the 3 months preceding filing, there must be at least 4 market makers for the securities (1934)
-Aggregate commissions or discounts received by underwriters must be less than 10% of the offering
-Issuer or subsidiary cannot have failed to pay a dividend on preferreds or have defaulted on any bond or long-term lease since the end of the last fiscal year before filing
-Statement of eligibility
-Name, address and form of organization of the issuer
-Statement describing the offering
-Copy of the prospectus filed with SEC
-If nonissuer distribution, must contain name, address, and amount of securities and reason for offering
-For equities, the offering price must be $5 or more
Security Filing Fees
Issuers pay at initial registration and annual renewal
Security Effective Date Details
-Until 1 year from effective date, may not be withdrawn before then
-Must have no stop order by SEC or Admin
-All required information and documents on file for at least 5 days
-Fee was paid
Security Coordination Filing
-Must be filed with 3 copies of latest prospectus filings with SEC
-Copy of articles of incorporation, underwriting agreements, indentures for securities, or other documents may be requested by Admin
-When federal registration becomes effective
-Must have no stop order by SEC or Admin
-All required information and documents on file for at least 10 days
-Statement of min and max offering prices and max underwriting discounts and commission has been on file for at least 2 business days
Security Qualification
Federal registration is already in effect or intrastate offering
1. General data about issuer or significant subsidiary
2. Information on issuer's directors and officers
3. Information on holders of 10% or more
4. For nonissuer distributions, name and address and securities of person the offering is for
5. Description of issuer's capitalization and long-term debt
6. Type and aount of securities, price, estimated selling fees and underwriting agreements
7. Estimated cash proceeds and purpose for use
8. Copy of every prospectus, letter, advertisement, or other to be used for offering, and a legal opinion for debt offering
9. Recent balance sheet and p/l statement for past 3 years
10. Any additional info from Admin
Security Effective Date
When determined by Administrator
Securities Exempt from Registration
-Any security issued or guaranteed by the US, any municipality or agency of US, or state
-Any security issued or guaranteed by the Canada, any municipality or agency of foreign national government
-Banks, savings institutions and trust companies
-Federal savings and loan association, federal credit union, or similar assoc.
-Insurance company
-Railroad, common carrier, public utility or holding company with specific regulations
-Federal covered securities (blue-chip exemption), include securities on any exchange (NYSE, NASDAQ, ASE, CSE) including right and warrants
-Not-for-profit organization (religious, educations, fraternal, charitable, social or trade and professional associations)
-Promissory note, draft, bill of exchange or BA maturing in less than 9 months, issued in denominations of $50k or more and rated in one of teh 3 highest rating categories
-Any investment contract issued in connection with an employee stock purhcase, savings, pension, profit-sharing or simila benefit plan if the Admin is notifi
Security Financial Reporting Requirements
May be required by Admin to file quarterly reports
Security Registration Denial, Suspension and Revocation
-Registration statement is incomplete, false or misleading
-Provision of USA or any rule imposed by Admin has been willfully violated
-Any officer of issuer or underwriter has been convicted in a crime involving securities
-Security is already subject to a stop order or an injunction by federal or state court
-Issuer's enterprise or business includes illegal activities
-Offering is fraudulent or terms are unfair, unjust or inequitable
-Sellers compensation is unreasonably large
-Registrant fails to pay proper filing fees
-Not based on weak financial condition or if facts were known to Admin on effective date (unless proceeding began in 30 days)
-Registrant must be notified and may submit written request for hearing, to be held within 15 days
Federally Covered Security State Registration Requirements
-Not required to be registered at state level
-Register with SEC
Definition Federally Covered Securities
-Listed on NYSE, ASE or NASDAQ
-Listed on other national exchanges determined by the SEC to have listing standards similar to above exchanges
-Securities of an issuer that are equal to or greater in seniority than a listed security
-Offered or sold to qualified purchasers
Federally Covered Securities Registration Requirements
-Require issuer to complete notice filing, submit sales reports and/or consent to service of process
-Payment of registration fee
-Investigate and bring enforcement actions regarding fraud, deceit or unlawful conduct by a b/d in connection with the sale of securities


Transaction Exempt from Registration
-Isolated nonissuer transactions, whether effected through B/D or not
-Nonissuer transaction by agent of B/D provided the issuer is engaged in business and securities must: A. senior to issuer's commond stock and B. be outstanding for least 3 years with no defaults OR A. be traded by public at least 90 days B. priced reasonably C. not part of underwriter's initial allotment D. information about issuer is publicly available E. issuer's stock is traded on one of teh exchanges or is a UIT or been in business for 3 years or total assets equal at least $2MM
-In security of company that A. is subject ot registration and reporting requirements of 1934 B. is registered under 1940 OR C. has filed with Admin information substantially the same as 1934 for at least 180 days prior to transaction
Transaction Exempt from Registration
Nonissuer transaction effected through registered B/D on an unsolicited basis
-Between issuer and underwriter
-Bond secured by real estate mortgage or deed of trust provided sold as a unit
-By an executor, adminstrator guardian, trustee in bankruptcy, sheriff, marshall or conservator
-Bona fide pledgee if sale is not to evade USA
-Sale or offer to a bank, savings institution, trust, insurance, investment companies, pension or profit-sharing trust, other financial/institutional buyer or B/D
-Directed to no more than 10 retail investors that are purchasing for investment purposes only and no commissions is paid (private placement exemption)
-Preorganization certificate if no commission is paid, participants less than 10, no payment made to subscriber
-Existing security holders of issuer if no commission is paid or issuer files a notice with terms and Admin does not disallow in 5 days
-Offer of a security that has been filed under USA and 1933 if no stop order is in effect
-Listed on or senior to those listed