Investment Advisor SEC Registration and Regulatory Compliance 2

Question 1

What is the primary purpose of the Investment Advisers Act of 1940?

Accepted Answer

To regulate the activities of investment advisers and protect advisory clients

Answer

The Investment Advisers Act of 1940 was enacted to regulate investment advisers and provide protections to their clients through registration and conduct requirements.

Question 2

Under SEC rules, investment advisers must maintain client records for a minimum of how many years?

Accepted Answer

5 years

Answer

SEC rules require investment advisers to maintain most records for a minimum of five years, with certain records kept for the life of the firm plus five years.

Question 3

Which SEC rule requires investment advisers to adopt written compliance policies and procedures?

Accepted Answer

Rule 206(4)-7

Answer

SEC Rule 206(4)-7 requires registered investment advisers to adopt and implement written compliance policies and procedures and designate a Chief Compliance Officer.

Question 4

An investment adviser must deliver their Form ADV brochure to a prospective client no later than:

Accepted Answer

At the time of or before entering into an advisory contract

Answer

Advisers must deliver the ADV Part 2 brochure to clients at or before the time they enter into an advisory agreement.

Question 5

Under the Dodd-Frank Act, family offices are excluded from the definition of investment adviser if they:

Accepted Answer

Advise only family members and have no public clients

Answer

The Dodd-Frank Act created a family office exclusion for entities that advise only family members, employ no non-family clients, and are not publicly known as investment advisers.

Investment Advisor Practice Test

Investment Advisor Practice Test

Investment Advisor SEC Registration and Regulatory Compliance 2