Securities Act of 1933
Investment Company Act of 1940
Investment Advisers Act of 1940
Reg T
Rules & Regs for Broker Dealers
100
The two basic objectives of the Securities Act of 1933.
What is that the investor receives full disclosure prior to any purchase (all material info that relates to issuer & the offering) & to prohibit deceit, misrepresentations & other fraud in the sale of securities?
100
Required if the investment company offers shares to the public and has more than 100 shareholders.
What is register with the SEC?
100
1) Providing ADVICE about securities 2) Being in the BUSINESS of giving advice 3) Being COMPENSATED for the advice
What is the ABC test for Investment Advisors?
100
This act granted the Federal Reserve Board the power to establish rules governing a broker-dealer's ability to extend credit on a customer's securities purchase?
What is the Securities Exchange Act of 1934?
100
This agency can censure a broker-dealer, suspend, or revoke their registration.
What is the SEC?
200
A summary of the registration statement.
What is the Prospectus?
200
The required minimum net worth of an investment company.
What is $100,000?
200
Includes Banks, Designated professionals, Broker-dealers, Publishers of bona fide publications and government Securities advisers.
Who is excluded from the Investment Advisor definition?
200
Failing to pay for securities purchased in hopes of earning profit. A member firm is required to sell out the securities and freeze the customer’s account for 90 days.
What is Free Riding?
200
The firm is acting as this when they buy or sell a security on behalf of a client and receive a commission.
What is the clients agent or broker?
300
This communication is sent if the SEC believes a Registration Statement or Prospectus is incomplete or misleading.
What is a deficiency letter to the issuer? (The issuer is able to file an amended registration statement)
300
Annual reports must be sent to SEC and Semiannual reports to shareholders within 60 days of end of the period for which report was made.
What are the Investment company’s Reporting Requirements?
300
The Act which established the appropriate regulator for Investment Advisors, based on their assets under management.
What is the National Securities Markets Improvement Act of 1996 (NSMIA)
300
Purchases made in either case accounts or margin accounts must be paid within this many days or the member firm must cancel the transaction by selling the securities.
What is two days after the regular-way settlement date? (Note: Since regular way settlement date is 3 business days after the trade date, the latest Reg T payment date is five business days after the trade.)
300
The SEC has the power to do these 3 things if a broker-dealer or person associated with it under specific circumstances.
What is censure, place limitations on activities, or suspend or revoke the registration? Note: This includes 1) Being convicted of a felony in the previous 10 yrs or misdemeanor involving the purchase or sale of securities, made a false report, or engaged in financial related crimes. 2) Making false or misleading material statements or omitting material facts. 3) Been prohibited by a court from acting as an investment adviser, underwriter, broker or dealer. 3)Willfully violated any provision of the federal securities laws
400
The phase you are able to provide customers with a "Red Herring."
What is the second phase or the Waiting period?
400
Balance sheet, income statement, list of securities owned and statement of any recent changes in portfolio.
What are 4 items which must be included in annual and semi-annual reports?
400
The 3 items which must be given to prospective customers or clients in a clear and conspicuous manner.
What is their name, the entity on whose behalf the call is being made, a phone number or address where they can be reached?
400
A "Bearish" short sale.
What is when investors sell stock short & want the stock to fall in value. Note: A "Bullish" short sale is when the investor wants the stock to rise in value.
400
$5,000,000 and/or 20 years in prison per Violation (ask Martha).
What is the maximum criminal fine/penalty for Insider Trading?
500
4 common securities or transactions exempt from the registration & prospectus delivery requirements of the Securities Act of 1933.
What are 1) U.S. government securities 2) Municipal securities 3) Short-term corporate debt instruments (commercial paper maturing in 270 days or less) 4) Securities that are distributed thru private placements?
500
Information which must be included in any sales literature containing performance data.
What is the SEC mandated yield and the maximum sales charge?
500
While SEC rules do not require it, most Investment Advisors will create this document which must include specific provisions such as assigning it to another firm without client consent, notification if a change in the partnership, and generally no performance based fees. .
What is an Investment Advisory Contract?
500
3 types of market manipulations.
What are Matched orders (or wash sales), Ghosting (artificially creating appearance of active trading), and Pegging or Capping (raising or lowering the price of a security)?
500
This must include information like settlement date, amount of remuneration, capacity in which the broker-dealer acted, & number of shares, units or principal amount (among others).
What is a confirmation of a purchase or sale of securities? Note: Other requirements include the identity and price of the security bought or sold, date & time of the transaction, dollar price & yield on debt securities & if the security is callable.
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