CIC CIC - Certified Investment Counselor Securities Law and Regulatory Compliance Questions and Answers 1

Question 1

Under the Investment Advisers Act of 1940, an adviser with assets under management of $110 million or more must register with:

Accepted Answer

The SEC

Answer

Advisers managing $110 million or more in AUM are required to register with the SEC under the Investment Advisers Act of 1940.

Question 2

SEC Form ADV Part 2 is required to be delivered to clients primarily to:

Accepted Answer

Provide clients with a 'brochure' disclosing the adviser's business practices, fees, and conflicts

Answer

Form ADV Part 2 (the 'brochure') discloses material information about the adviser's services, fees, conflicts of interest, and disciplinary history to clients.

Question 3

The Securities Exchange Act of 1934 primarily regulates:

Accepted Answer

The trading of previously issued securities in secondary markets

Answer

The Securities Exchange Act of 1934 governs secondary market trading, broker-dealers, and established the SEC.

Question 4

Rule 10b-5 under the Securities Exchange Act of 1934 prohibits:

Accepted Answer

Fraud, misrepresentation, and insider trading in connection with securities transactions

Answer

Rule 10b-5 is the SEC's primary anti-fraud rule, prohibiting any fraudulent, deceptive, or manipulative act in connection with the purchase or sale of securities.

Question 5

Under the Investment Company Act of 1940, a mutual fund is legally classified as a:

Accepted Answer

Registered investment company

Answer

Mutual funds are registered investment companies under the Investment Company Act of 1940, subject to its regulatory requirements.

(CIC) Certified Investment Counselor Practice Test

(CIC) Certified Investment Counselor Practice Test

CIC CIC - Certified Investment Counselor Securities Law and Regulatory Compliance Questions and Answers 1