RIA Securities Law & Regulations 2

Question 1

The Dodd-Frank Wall Street Reform Act of 2010 changed investment adviser regulation by:

Accepted Answer

Raising SEC registration thresholds and expanding registration requirements for certain advisers

Answer

Dodd-Frank raised the SEC registration threshold to $100-110M AUM and eliminated the private adviser exemption, bringing many hedge fund advisers under registration.

Question 2

State securities laws are known as:

Accepted Answer

Blue Sky Laws

Answer

State securities laws are called Blue Sky Laws, designed to protect investors from speculative schemes with no basis in reality.

Question 3

An insider trading violation requires:

Accepted Answer

Trading based on material, non-public information in breach of a duty

Answer

Insider trading is illegal when material, non-public information is used to trade in breach of a fiduciary or other duty of trust.

Question 4

The Investment Advisers Act anti-fraud provisions apply to:

Accepted Answer

All persons meeting the definition of investment adviser, regardless of registration

Answer

Section 206's anti-fraud provisions apply to all persons meeting the definition of investment adviser, whether registered or not.

Question 5

FINRA is primarily responsible for regulating:

Accepted Answer

Broker-dealers and their registered representatives

Answer

FINRA (Financial Industry Regulatory Authority) is a self-regulatory organization that oversees broker-dealers and their registered representatives.

(RIA) Registered Investment Advisor Practice Test

(RIA) Registered Investment Advisor Practice Test

RIA Securities Law & Regulations 2