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

Publishers of bona fide general-circulation newsletters providing impersonal advice are excluded from the definition of investment adviser under the 'publisher exclusion.'

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

An investment adviser must have at least $110 million in AUM to register with the SEC, though advisers managing $100–$110 million may register with either SEC or states.

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 204A-1 requires all SEC-registered investment advisers to adopt and enforce a written code of ethics covering personal securities transactions.

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

IARs must register in each state where they conduct advisory business, requiring a new Form U4 filing that meets the new state's licensing requirements.

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

Rule 204-3 requires delivery of the brochure at least 48 hours before contract execution, or at signing if the client has a 5-day right to terminate without penalty.

(CIC) Certified Investment Counselor Practice Test

(CIC) Certified Investment Counselor Practice Test

CIC Investment Adviser Regulations 2