Exam 4: Uniform Securities Act USA and State Registration Requirements

As an agent, which of the following statements about the Securities Investor Protection Corporation (SIPC) can you legitimately make to your client?

If a person has had its license revoked by the Administrator of the state and has appealed the decision to a court of law, that person

Iggy recently started his own company. He soon discovered it required more cash to keep it going than he had anticipated. He ran an ad in the local paper for investors and got a response. He found a template for a promissory note on the internet, filled in the requisite information specific to the agreement he and the investor had worked out, and printed it out. On it, he promised to make monthly interest payments of 2% on the loan and to repay the principal amount at the end of 18 months. A few months after the arrangement, Iggy read an article in a small business publication that indicated that promissory notes had to be registered with the state unless they were sold in an exempt transaction, such as one enacted with a financial institution, prior to being offered for sale. The article indicated that a seller who had sold an unregistered note in error could remedy the situation by sending the buyer a formal offer to buy the security back, with interest. Iggy turned to the computer once again, found a form that could be used for a formal offer of rescission, filled it out, and sent it to the investor. Having done this,

Which of the following is not a prohibited practice for a broker-dealer?

Which of the following does not describe a prohibited practice for broker-dealers under the NASAA Model Rules? I. SecureMoney Broker-Dealers has received a request from a client who wants SecureMoney to "identify a few solid firms in the Asian market and invest up to $20,000 in them." SecureMoney executes the purchases and receives the requisite signed discretionary authorization from the client before the settlement date. II. CanDo Broker-Dealers executes a margin transaction for a client, promptly receiving a signed, written margin agreement from the client after the transaction takes place. III. GetErDone Broker-Dealers receives a call from a client who wants to purchase some securities on margin. GetErDone has the client come into the office to sign a properly executed margin agreement prior to effecting the transaction.

You have recently discovered that a security you purchased has not been registered with the state, nor is it exempt from registration. You can file a civil claim against the seller as long as you do so within

Which of the following entities would be required to register with the state as a broker- Dealer under the guidelines of the Uniform Securities Act (USA)?

According to the NASAA Model Rules, which of the following institutions would not be considered a qualified custodian?

Under the Uniform Securities Act, which of the following does not need to be included when filing to register a security issue with the state?

According to the NASAA Model Rules, a broker-dealer is not permitted to allow a customer to engage in margin transactions unless

Once a person has filed an application with the Administrator, and in doing so has truthfully disclosed every material fact, how long does the Administrator have after the effective date of the registration to commence a proceeding to deny, suspend, or revoke that person's license based on those facts?

Which of the following practices would be prohibited in connection with the sale of investment company shares? I. selling a client shares of a load stock fund when a no load stock fund with the same investment objective exists II. selling the client shares of five S&P 500 Index mutual funds, offered by different fund families III. encouraging a client to swap his money between two funds in the same family without informing him that this creates a taxable event

Newbie Corporation is considering the possibility of an interstate initial public offering (IPO) of its stock. In the initial meetings with BigFee Investment Bankers, Newbie has learned that the underwriting spread will be 15%. Although the actual offering price won't be set until Newbie's registration statement is approved by the SEC, BigFee has indicated that the offer price will probably be between $3 and $4 a share and that the stock will initially be listed on the OTC Bulletin Board. What methods for state registration does Newbie have available? I. registration by coordination II. registration by notification III. registration by qualification

After passing the necessary exams, you must submit which of the following to the state Administrator when applying for registration as an agent?

An agent cannot tell a client that a mutual fund is "no load" if the fund has I. a front-end load II. a contingent deferred sales load III. 12b-1 fees

Teche is an agent with broker-dealer CanDo, and his only compensation is the commissions he earns on trades he executes. He has applied for and been granted an adjunct teaching position with a local university that will allow him to earn money while he is establishing himself. Which of the following statements are true?

Which of the following actions is the Administrator of a state empowered to take?

BondsRUs is a broker-dealer that (unsurprisingly) specializes in bonds. The firm has found that it is able to sell Treasury bonds that it buys for $90 per $100 of par value for $99 per $100 of par value to some of its more naïve clients, who never pay attention to the confirmation statements BondsRUs sends them. BondsRUs is guilty of

Which of the following is not one of the criteria for a security to be eligible for registration by notification?

The Administrator of a state will deny the registration of a security if I. the mandated filing fee has not been paid. II. the compensation of the underwriters is excessive. III. the registration statement is incomplete. IV. the issuer is registering the security through the registration by coordination process and has not complied with all the stipulated requirements.