Securities Law & Regulations Flashcards
6 cards from real RIA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Securities Law & Regulations flashcards as text
The Dodd-Frank Wall Street Reform Act of 2010 changed investment adviser regulation by:
Answer: Raising SEC registration thresholds and expanding registration requirements for certain advisers
Dodd-Frank raised the SEC registration threshold to $100-110M AUM and eliminated the private adviser exemption, bringing many hedge fund advisers under registration.
State securities laws are known as:
Answer: Blue Sky Laws
State securities laws are called Blue Sky Laws, designed to protect investors from speculative schemes with no basis in reality.
An insider trading violation requires:
Answer: Trading based on material, non-public information in breach of a duty
Insider trading is illegal when material, non-public information is used to trade in breach of a fiduciary or other duty of trust.
The Investment Advisers Act anti-fraud provisions apply to:
Answer: All persons meeting the definition of investment adviser, regardless of registration
Section 206's anti-fraud provisions apply to all persons meeting the definition of investment adviser, whether registered or not.
FINRA is primarily responsible for regulating:
Answer: Broker-dealers and their registered representatives
FINRA (Financial Industry Regulatory Authority) is a self-regulatory organization that oversees broker-dealers and their registered representatives.
A 'no-action letter' from the SEC:
Answer: Provides informal guidance that the SEC staff will not recommend enforcement for a described activity
No-action letters provide informal SEC staff opinions that they would not recommend enforcement action for a specific described activity.
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