Federal Laws/regs
Primary market registration
Act’33
Natural individual or organization able to enter into a binding contract
What is a person?
Must file agents u4 at seperation
What is Old firm BD, agent, new firmBD
RF+([mr-RF] * B)
What is CAPM?
Must file adv / U4 when federally covered
What is the IAR?
State covered is the IA
Securities act 1934
Secondary market
SEC
Form ADV, suprise inspections, quarterly statements. $35k net worth
What you need to hold funds
No office no retail (no)?
What is no register?
This rule can tell us how long it will take to double client investments or the rate needed
What is the rule of 72
72/%return
Gives incidental advice
What is plate
Investment advisor
Act 1940
Regulates covered advisors
exempt security?
what are Gov’t, can’t, com carrier, fed cob’s, emp. Plan, non profit
ABC
What is agents, broker, commission
(Gains -RF RETURN)/standard deviation
What is the Sharpe ratio?
Doesn’t register with the state
What is federally covered
This reaffirmed the definition of IA
SEC release IA-1092
Priv-placement, isolated non issuer, unsolicited, sheriff, guardian, preorg
What is exempt transaction?
Makes a profit from markups and mark downs
Who is the principal?
All gains or losses / original investment
What is total return?
IA and IAR can’t borrow or lend to a client but BD or agent can in this account?
What is a Margin account
Material nonpublic, $25mil, treble damage, $5mil-20yrs
Insider trading act 1988
5-5-3 rule
What are the Criminal penalties under the NASAA
Just one client in a state
What is the no exception under Demi minus rule for BD or Agents
Measures actual return as compared to expected return
What is alpha? Market return- CAPM
Commits crazy stuff to memory so they represent an IA?
What is an IAR?