Uniform Investment Adviser Law Flashcards

An adviser who solicits clients on behalf of another registered investment adviser must disclose which of the following to the solicited client at the time of solicitation?

Answer: The solicitor's name, the adviser's name, and the compensation arrangement

Solicitors must provide clients a written disclosure statement identifying the solicitor, the adviser, and the nature and amount of the compensation paid for the referral.

Which of the following investment advisers is REQUIRED to register with the SEC rather than individual states?

Answer: An adviser managing $150 million in assets across multiple states

Investment advisers with $110 million or more in AUM are required to register with the SEC rather than with individual state securities regulators.

Under state law, investment adviser contracts must be in writing and must NOT include a provision that:

Answer: Allows the adviser to assign the contract without client consent

Under the Uniform Securities Act, an investment adviser contract cannot be assigned to another party without the client's written consent.

A registered investment adviser's principal is convicted of securities fraud in another state. The home-state administrator can:

Answer: Deny or revoke the adviser's registration based on the conviction

A felony conviction related to securities allows the state administrator to deny or revoke the firm's registration after appropriate notice and opportunity for a hearing.

A client sues a state-registered investment adviser for fraud and wins a civil judgment. Under the Uniform Securities Act, the statute of limitations for the client's action was:

Answer: Two years from discovery, or three years from the violation, whichever comes first

Under the Uniform Securities Act, the statute of limitations for investment adviser fraud claims is the earlier of two years after discovery or three years after the violation.

Which of the following activities would be considered an 'unethical business practice' for a state-registered investment adviser?

Answer: Recommending securities in which the adviser has an undisclosed financial interest

Recommending securities in which the adviser has an undisclosed financial interest is a breach of fiduciary duty and constitutes an unethical business practice under state securities law.

Under the NASAA Model Rule on investment adviser recordkeeping, a state-registered investment adviser must generally retain books and records for a minimum of:

Answer: Five years

Most state investment adviser recordkeeping requirements mandate that records be maintained for a minimum of five years, consistent with NASAA model rules.