Professional Development & Standards Flashcards
7 cards from real Series 66 – Uniform Combined State Law Exam practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Professional Development & Standards flashcards as text
Which advertising statement by an investment adviser is misleading and prohibited?
Answer: A statement implying that registration means the SEC or a state has approved or endorsed the adviser's skills
Implying that registration signifies government approval or endorsement of the adviser is misleading.
A performance fee based on a share of capital gains or appreciation in a client's account is generally prohibited unless:
Answer: The client is a qualified client and the contract meets conditions
Performance-based fees are generally permitted only for qualified clients that meet asset or net worth tests.
Under Regulation S-P, a financial firm must provide a customer with its initial privacy notice:
Answer: At the time the customer relationship is established, and annually thereafter
Customers receive an initial privacy notice when the relationship begins and an annual notice afterward, subject to limited exceptions.
A prospective customer refuses to provide any information about income, net worth, or objectives. What is the best course of action for the agent?
Answer: Document the refusal and limit recommendations to conservative ones consistent with available information
The agent should document the refusal and make only cautious recommendations, since suitability cannot be fully assessed.
A broker-dealer agent exercises discretion limited only to the time and price of an order for a specific security and amount that the customer selected. Written discretionary authority is generally:
Answer: Not required, but the discretion generally lasts only until the end of the business day
Time and price discretion alone does not require written authorization, but it expires at the end of the business day on which it was granted.
Under FINRA's gift rule, an associated person may give a gift to any one person in relation to the firm's business of no more than:
Answer: $100 per year
FINRA Rule 3220 limits gifts to any single person to $100 per year, with exceptions for ordinary business entertainment.
Which disclosure of customer nonpublic personal information is permitted under Regulation S-P without giving the customer an opt-out opportunity?
Answer: Disclosure to regulators or law enforcement in response to a legal process
Exceptions to opt-out include disclosures required by law, such as responding to regulators or legal process.
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