SEC Registration and Regulatory Compliance Flashcards
6 cards from real Investment Advisor practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 SEC Registration and Regulatory Compliance flashcards as text
What is the primary purpose of the Investment Advisers Act of 1940?
Answer: To regulate the activities of investment advisers and protect advisory clients
The Investment Advisers Act of 1940 was enacted to regulate investment advisers and provide protections to their clients through registration and conduct requirements.
Under SEC rules, investment advisers must maintain client records for a minimum of how many years?
Answer: 5 years
SEC rules require investment advisers to maintain most records for a minimum of five years, with certain records kept for the life of the firm plus five years.
Which SEC rule requires investment advisers to adopt written compliance policies and procedures?
Answer: Rule 206(4)-7
SEC Rule 206(4)-7 requires registered investment advisers to adopt and implement written compliance policies and procedures and designate a Chief Compliance Officer.
An investment adviser must deliver their Form ADV brochure to a prospective client no later than:
Answer: At the time of or before entering into an advisory contract
Advisers must deliver the ADV Part 2 brochure to clients at or before the time they enter into an advisory agreement.
Under the Dodd-Frank Act, family offices are excluded from the definition of investment adviser if they:
Answer: Advise only family members and have no public clients
The Dodd-Frank Act created a family office exclusion for entities that advise only family members, employ no non-family clients, and are not publicly known as investment advisers.
Which of the following is considered an 'investment adviser' under the Investment Advisers Act of 1940?
Answer: A firm that manages client portfolios for a fee
A firm that manages client portfolios for compensation meets all three prongs of the adviser definition: advice, about securities, for compensation.