Term
| Consent to Service of Process |
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Definition
| A document that irrevocably appoints the Administrator as the registered person's attorney for the service of legal papers. Any notice is considered valid and has the same legal force as if served on the registrant personally. The filing of this is a convenience for customers with complaints that they wish to pursue in court. |
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Term
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Definition
| An obligation posted by a registrant to cover the costs of possible legal action arising from violations of the Uniform Securities Act. |
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Term
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Definition
| To have legal responsibility for, or control over, someone's assets |
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Term
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Definition
1. Filing an application
2. Paying a registration fee
3. filing a Consent to Service of Process
4. Possibly posting a surety bond |
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Term
| Different Types of Accounts: |
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Definition
- Individual
- Joint
- TOD
- Margin |
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Term
| When an Investment Adviser/IARs are exempt from registration in a state: |
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Definition
1. The person has no place of business in the state and the person's only clients are other financial institutions with at least $1 million in assets.
2. The person has no place of business in the state and the person does not direct communications to more than five noninstitutional clients in the the state within 12 consecutive months. |
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Term
| Requirements for investment advisers that have custody of client assets: |
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Definition
1. Notify Administrator of custody using Form ADV.
2. Use a qualified custodian to hold the funds and securities in a separate account.
3. Notify all clients of the custodian's information.
4. Send account statements to clients quarterly. |
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Term
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Definition
| These forms are required by the state for advisers to register and most also require that this be done electronically through the Investment Adviser Registration Depository (IARD) System. |
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Term
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Definition
| This must be paid both when its application is initially filed and when its registration renewed. If an application is denied or withdrawn, the Administrator will retain part of the fee. |
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Term
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Definition
| The day on which registration becomes effective on noon on the 30th day after filing the application. |
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Term
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Definition
| All registrations expire/terminate annually on December 31st. |
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Term
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Definition
| The broker-dealer's liquid net worth. |
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Term
| De Minimis Exemption for Agents |
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Definition
Allow two situations in which agents may conduct business with an existing client without being registered in the state.
1. If an agent's application for registration is pending.
2. If the client has moved to the state temporarily. |
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Term
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Definition
| A single account opened by one person for his exclusive benefit. That person is the only one who may direct activity in the account unless he has specifically given this authority to a third party in writing. |
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Term
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Definition
| An account that has more than one owner. If the transaction requires a signature, then all joint owners must sign for it. |
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Term
| Transfer-on-Death (TOD) Account |
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Definition
| A provision for accounts; allows the account to pass directly to the named beneficiary when the account owner dies without becoming part of the estate and going through probate. |
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Term
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Definition
| A client with this type of account only needs to pay a portion of the purchase price for the securities, borrowing the remainder from a brokerage firm. |
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Term
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Definition
| This must be prepared for every order that a firm accepts from a client before the order is executed; must include the client's account number, the time the order was received from the client, the time it was entered, and the time the trade was executed. |
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Term
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Definition
| This part of the ADV form is intended for regulators; asks detailed questions about the adviser's business. |
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Term
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Definition
| This part of the ADV form is designed to provide prospective clients with information about the adviser. |
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Term
| Minimal Financial Requirements for Investment Advisers |
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Definition
| According to the Investment Advisers Model Rule, advisers that have custody of clients assets must maintain a minimum net worth of $35k at all times. An adviser is required only to satisfy the min. net worth requirement of the state of it's principal office. |
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Term
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Definition
Registered investment advisers must make and keep records that must be preserved for 3 years.
-Broker-dealers must keep records for 3 years.
-Investment Advisers must keep them for 5 years. |
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Term
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Definition
| Requires that the adviser give each client a written disclosure document at a specific time. May be either Form ADV Part II or a brochure prepared by the advisory firm. |
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Term
| Minimal Financial Requirements for Investment Advisers |
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Definition
| According to the Investment Advisers Model Rule, advisers that have custody of clients assets must maintain a minimum net worth of $35k at all times. An adviser is required only to satisfy the min. net worth requirement of the state of it's principal office. |
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Term
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Definition
Registered investment advisers must make and keep records that must be preserved for 3 years.
-Broker-dealers must keep records for 3 years.
-Investment Advisers must keep them for 5 years. |
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