RIA Securities Law & Regulations 3

Question 1

The Securities Investor Protection Corporation (SIPC) protects investors against:

Accepted Answer

Broker-dealer failure and missing customer assets

Answer

Investment losses due to market declines

Answer

Mutual fund manager fraud

Answer

Investment adviser insolvency

Question 2

The anti-money laundering (AML) requirements under the Bank Secrecy Act apply to investment advisers by requiring:

Accepted Answer

Advisers to implement written AML programs and suspicious activity reporting

Answer

All advisers to file currency transaction reports for trades over $10,000

Answer

Advisers to refuse all cash payments

Answer

Advisers to verify client identity only for foreign nationals

Question 3

Regulation Best Interest (Reg BI) applies to:

Accepted Answer

Broker-dealers making recommendations to retail customers

Answer

Investment advisers under the Advisers Act

Answer

All financial professionals

Answer

Only institutional investors

Question 4

Which of the following is considered a 'covered security' under NSMIA, preempting state registration requirements?

Accepted Answer

Securities listed on national securities exchanges and investment company securities

Answer

Securities sold only within one state

Answer

Securities sold through private placements only

Answer

Municipal bonds only

Question 5

The Investment Advisers Act's definition of 'investment adviser' specifically excludes:

Accepted Answer

Broker-dealers whose advice is solely incidental to brokerage services and who receive no special compensation for advice

Answer

Anyone providing securities advice

Answer

All banks and bank affiliates

Answer

Anyone with less than $1 million AUM

Question 6

Registration with the SEC as an investment adviser requires submission of:

Accepted Answer

Form ADV via the IARD system

Answer

Only an annual tax return

Answer

Form 10-K and annual reports

Answer

Form U4 through FINRA WebCRD