Term
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Definition
| A registrar maintains the stock record book and must account for all shares. |
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Term
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Definition
| $50M or less in any 12 month period. Circular instead of prospectus. |
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Term
| If you want to participate in a private securities transaction, you must: |
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Definition
1. Give written notice
2. Obtain written approval
3. BD supervises and records |
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Term
| What is the short term tax time? |
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Definition
| 12 months or less, trade date to trade date. |
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Term
| How much time to qualify for long term gains |
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Definition
| 12 months plus one day trade date to trade date |
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Term
| How long is the cooling off period? |
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Definition
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Term
| How long does a firm have to file a suspicous activity report? |
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Definition
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Term
| Members of underwiting syndicate must be paid in how many days? |
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Definition
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Term
| Exception to definition of an advisor |
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Definition
| A person would not be considered to be in the business if advice is "only given in rare and isolated instances." |
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Term
| What must appear on an order ticket and what does NOT need to appear? |
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Definition
| ATTA boy! Account number; Time received; Terms; Agent on account. (price when received does not - cause it will change nor does name of market maker or the exchange) |
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Term
| Why would advertising aimed at the general public that makes the claim the IA is "fee only " and the fee is based only on performance be a violation of the IA Act of 1940? |
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Definition
| Because performance based fees are only allowed with qualified clients under the act. |
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Term
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Definition
Deductible contribution limits of $3,700 for individuals and $7,400 for families plus an additional $1,000 catch-up contribution for persons 55 and older.
b. Tax-deferred earnings
c. Within limits, money can be used at any time for qualified medical expenses and is tax free when used for such purposes. |
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Term
| If an IA acts as a broker dealer and an investment advisor, what must it do? |
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Definition
| Disclose to client that it is acting in both capacities. |
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Term
| How do you calculate the averge or effective tax rate? |
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Definition
| Divide amount of tax paid by taxable income. |
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Term
| T/F an investment advisor is automatically considered an accredited investment advisor uner the 33 ACT. |
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Definition
| False. Investment company yes, but not adviser. |
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Term
| Who sets the rules for exention of credit? |
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Definition
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Term
| When a customer deposits more than $10,000 in a single day. |
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Definition
| File CTR: Currency transaction report must be filed. |
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Term
| How many days must a bank verify customer identity after opening account? |
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Definition
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Term
| What are exempt securities under 33 ACT. |
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Definition
| Gov Sec; Reg D; intrastate offerings; Munis; commercial paper; securities issued by banks, motor cariers; NOTE: Insurance companies and investment company shares are NOT NOT NOT excluded. |
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Term
| What is excluded from definition of an Investment Advisory firm? |
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Definition
| IARs; Banks Banks Banks Banks; Savings; Trust Companies; Investment Companies even if they charge an advisory fee for their services. |
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Term
| When are publishers excluded? |
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Definition
| If advice is general about securities and it does not respond to specific questions from readers. |
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Term
| When would BDs and Agents be excluded? |
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Definition
| If they are only getting commissions and getting no extra compensation. |
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Term
| If you are in the 37% tax bracket, what is your long term cap gain rate |
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Definition
| Income of 539k single, couple 647,850 filing jointly, = 20% (not 15%) |
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Term
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Definition
| Investors making contributions to 529 Plans generally use the annual gift tax exclusion of $16,000 or can aggregate the gift tax exclusion to contribute $80,000 ($16,000 x 5) in one year to kick start the program. If the aggregate gift tax is used, no further gift tax gifts are allowed for 5 years. Married couples may contribute up to $160,000 for each beneficiary as long as no further gifts are made to that beneficiary for the next 5 years. |
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Term
| These professions are generally excluded.Hint: LATE. |
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Definition
| Lawyers, Accountants, Teachers, Engineers. |
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Term
| If you become the owner of more than X% oustanding stock listed on a national exchange when must you report to SEC? |
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Definition
| More than 5%, report in 10 days. |
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Term
| An Access person includes who and when must these access persons report their own transactions? |
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Definition
| Most advisers and all officers, directors and partners of the IA; must report quarterly to CCO. |
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Term
| Does SEC have jurisdiction over national Banks? |
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Definition
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Term
| When must prospectus be delivered? |
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Definition
| No later than purchase confirmation. |
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Term
| How are dividends taxed on cash dividends? |
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Definition
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Term
| What percent is considered an "insider" or principal stock holder? |
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Definition
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Term
| What are non-qualified dividends and how taxed? |
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Definition
| Paid by REITS Money Market accounts and limited parnterships - taxed as ordinary income |
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Term
| What happens after cooling off period? |
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Definition
| Registration becomes effective and SEC allows sale of security. |
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Term
| What report is filed if a firm notices suspicous activity and what amount triggers the report? |
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Definition
| SAR - Suspicious Activity Report, $5,000 |
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Term
| What are terms of commissioners? |
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Definition
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Term
| What are securities under 33 ACT? |
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Definition
| Stocks, bonds, rights, warrents; fractional interest in oil and gas rights NOT future, real estate, precious metals, collectables. |
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Term
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Definition
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Term
| What are qualified dividends and how taxed? |
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Definition
| Taxed as ordinary income but qualifiy for reduced tax rate of 15%. Represent most common dividends. |
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Term
| What is long term capital gains rate? |
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Definition
| That is 15% (20% if 37% tax bracket) |
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Term
| What is the marginal tax rate? |
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Definition
| The tax rate that is paid on the last dollar you made. |
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Term
| How is a BD that is a member of a syndicate compensated? |
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Definition
| Through the underwriting spread, not commissions. |
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Term
| What do transfer agents do v. what clearing agencies? |
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Definition
| Transfer agents cancel all certificates and issue new ones. Transfer agents do not include clearing agencies. Clearing agencies handle the processing of settlements of securities trades. |
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Term
| T/F an investment company is an accreddited investor. |
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Definition
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Term
| How long may a surviving spouse use the qualifying widow(-ER) with dependent children? |
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Definition
| Two years - let's spouse continue to file joint return |
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Term
| How does the exclusion list for IAs differ from the USA exclusion list? |
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Definition
| Under USA, an advisor must regsiter to give advice on US gov securities; under the Act of 40, you do not need to be registered and can be excluded from the definition. |
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Term
| What is head of household? |
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Definition
| Unmarried last day of year.; paid more than half the cost of maintaining home; a qualifying person lived with him 1/2 the year. |
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Term
| How are stock dividends taxed? |
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Definition
| Won't become taxable until sold. |
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Term
| Are federal covered advisors excluded? |
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Definition
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Term
| Are employee benefit plans excluded? |
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Definition
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Term
| What must you do if you refer to past past recommendations in an advertisement? |
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Definition
| you would have to furnish list of ALL recommendations made within the previous year or more. You can't cherry a period. |
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Term
| T/F: Market makers MUST be willing to buy and sell from their own accounts every day. |
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Definition
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