IACCP Study Questions with Complete Solutions
- elements of "investment advice" - Correct Answer 1. Advice about market trends
- Advice in historical or data form
- Advice about selecting an adviser
- Advice about the pros and cons of securities vs. other investments
- If they are registered in a state that is NOT subject to a Exam by the State securities administrator.
- reasons for small advisers to register with SEC - Correct Answer 1. principal state does not require
- state does not require any type of exam
What is the RAUM threshold for Registered Advisers? - Correct Answer $150 million What is the RAUM range of a "Mid Sized adviser"? - Correct Answer $25-100 million What two factors determine whether mid size advisers are required to register? - Correct Answer 1. Mid size advisers have to register if the state where their principal office is located does NOT require registration.
Define small adviser - Correct Answer Advisers with $25 million or less in assets under management
registration
IARD Account - Correct Answer All states that require registration of IAR's (RA's on CRD) which can be done in a IARD account When is the deadline to amend form ADV? - Correct Answer All firms that are registered with the SEC on Jan 1st 2012 must amend their ADV by March 30th, 2012 1 / 2
"buffer zone" to remain SEC registered - Correct Answer If a firm has assets between $90 - $110 million, then the firm is not required to switch their registration New rule on "private adviser exemption" - Correct Answer an adviser with its principal office and place of business in the U.S. is exempt from Advisers Act registration under the Private Fund Adviser Exemption if it: (1) acts solely as an adviser to one or more "Qualifying Private Funds" and (2) manages private fund assets of less than $150 million Foreign Private Adviser Exemption - Correct Answer Under Dodd-Frank Act, adviser will be exempt if:
- has no place of biz in the U.S.;
- has fewer than 15 clients and "investors" in the U.S. in "private funds" advised by the adviser;
- has aggregate assets under management attributable to clients "in the US" of less than $25 million;
- does not hold itself out generally to the public in the US as an investment adviser.
- definitions met for RAUM - Correct Answer (a) it has discretionary authority over and
- Exempt Institutions - Correct Answer 1. Intrastate Advisers
- Insurance company advisers
- Private Fund Advisers / Foreign Advisers / VC Advisers
- Charitable Organizations and Employees
- Commodities Trading Advisers
- Church Plans
- / 2
definition of RAUM - Correct Answer R.egulatory A.ssets U.nder M.anagement - under Advisers Act Section 203A(a)(2) this is when the advisor is providing continuous and regular supervisory or mamagement services
provides ongoing supervisory or management services with respect to the account; or (b) does NOT have discretionary authority over the account, but has ongoing responsibility to select or make recommendations, based upon the needs of the client, as to specific securities or other investments the account may purchase or sell and, if such recommendations are accepted by the client, is responsible for arranging or effecting the purchase or sale.