CIC Investment Adviser Regulations 2

Question 1

Under the Investment Advisers Act of 1940, which of the following is NOT considered 'investment advice' that triggers registration requirements?

Accepted Answer

Publishing a general-circulation financial newsletter with no individualized advice

Answer

Recommending specific securities to clients

Answer

Providing analysis of securities for compensation

Answer

Managing client discretionary accounts

Question 2

A state-registered investment adviser wants to move to SEC registration. The adviser must demonstrate AUM of at least:

Accepted Answer

$110 million

Answer

$25 million

Answer

$50 million

Answer

$100 million

Question 3

Which rule under the Advisers Act requires investment advisers to maintain a written code of ethics?

Accepted Answer

Rule 204A-1

Answer

Rule 204-2

Answer

Rule 206(4)-7

Answer

Rule 203A-1

Question 4

An investment adviser representative (IAR) who moves from one state to another must:

Accepted Answer

File a new Form U4 and meet the new state's requirements

Answer

Automatically transfer registration via FINRA's CRD system

Answer

Obtain SEC registration before practicing in the new state

Answer

Notify only the former state's securities regulator within 30 days

Question 5

The 'brochure rule' under the Advisers Act requires advisers to deliver Form ADV Part 2A to prospective clients:

Accepted Answer

At least 48 hours before signing an advisory contract, or at signing with a 5-day rescission right

Answer

Within 10 business days after the client relationship begins

Answer

Only upon client request after the engagement starts

Answer

At the time of each annual update filing

Question 6

Under the Advisers Act, which action by an investment adviser constitutes a violation of the anti-fraud provisions of Section 206?

Accepted Answer

Failing to disclose a material conflict of interest to a client

Answer

Charging a performance fee to a qualified client

Answer

Entering into a written discretionary agreement with an institutional client

Answer

Accepting compensation from a mutual fund for selling its shares to advisory clients

Question 7

Which of the following advisers is EXEMPT from SEC registration under the Advisers Act?

Accepted Answer

A venture capital fund adviser relying on the VC fund adviser exemption

Answer

An adviser with 20 clients managing $95 million in AUM

Answer

An adviser managing a single hedge fund with $180 million in AUM

Answer

An adviser providing services exclusively to ERISA pension plans with combined assets over $200 million