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 Securities Investor Protection Corporation (SIPC) protects investors against:
Answer: Broker-dealer failure and missing customer assets
SIPC protects customers when a SIPC-member broker-dealer fails, covering up to $500,000 in securities ($250,000 in cash) per account.
The anti-money laundering (AML) requirements under the Bank Secrecy Act apply to investment advisers by requiring:
Answer: Advisers to implement written AML programs and suspicious activity reporting
AML requirements impose obligations on financial institutions to maintain written AML programs, identify customers, and report suspicious activities.
Regulation Best Interest (Reg BI) applies to:
Answer: Broker-dealers making recommendations to retail customers
Reg BI requires broker-dealers to act in the best interest of retail customers when making investment recommendations.
Which of the following is considered a 'covered security' under NSMIA, preempting state registration requirements?
Answer: Securities listed on national securities exchanges and investment company securities
NSMIA preempts state Blue Sky registration for 'covered securities' including exchange-listed securities and investment company (mutual fund) securities.
The Investment Advisers Act's definition of 'investment adviser' specifically excludes:
Answer: Broker-dealers whose advice is solely incidental to brokerage services and who receive no special compensation for advice
Broker-dealers are excluded from the investment adviser definition if advisory services are solely incidental to their brokerage business and they receive no special compensation for advice.
Registration with the SEC as an investment adviser requires submission of:
Answer: Form ADV via the IARD system
Investment advisers register with the SEC by filing Form ADV through the Investment Adviser Registration Depository (IARD) system.
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