CIC Investment Adviser Regulations 5

Question 1

The 'Pay-to-Play' rule (Rule 206(4)-5) under the Advisers Act is designed to prevent investment advisers from:

Accepted Answer

Making political contributions to government officials in exchange for managing public pension fund assets

Answer

Rule 206(4)-5 prohibits investment advisers from providing advisory services for compensation to a government entity within 2 years after the adviser or covered associates make political contributions to officials who can influence the hiring of advisers.

Question 2

An investment adviser who provides advice solely about U.S. government securities is:

Accepted Answer

Excluded from the definition of investment adviser under the Advisers Act

Answer

Advisers who provide advice exclusively about U.S. government securities are excluded from the investment adviser definition under the Advisers Act.

Question 3

Under the Investment Advisers Act, which of the following is a permissible advisory fee arrangement?

Accepted Answer

A flat fee charged quarterly, based on assets under management

Answer

Asset-based fees charged as a percentage of AUM are a standard, permissible compensation structure that aligns adviser and client interests without violating the Act.

Question 4

Which of the following disclosures is required in Form ADV Part 2A regarding disciplinary history?

Accepted Answer

All material legal or disciplinary events that would be material to a client's evaluation of the adviser's integrity

Answer

Form ADV Part 2A requires disclosure of all material legal and disciplinary events involving the adviser or its management persons that would be material to a client's evaluation of the firm's integrity.

Question 5

An investment adviser that uses social media to promote its services must ensure that:

Accepted Answer

Posts constitute advertising subject to the Advisers Act Marketing Rule (Rule 206(4)-1)

Answer

Under the updated Marketing Rule (Rule 206(4)-1), social media posts that promote advisory services are considered advertisements subject to the rule's standards for fair, balanced, and non-misleading content.

(CIC) Certified Investment Counselor Practice Test

(CIC) Certified Investment Counselor Practice Test

CIC Investment Adviser Regulations 5