Unit 6

Question 1

Not included in the fee disclosure documents

Answer 1

• commissions
• markups and markdowns
• advisory fees

Question 2

Investment Adviser Brochure Rule Test trick

Answer 2

The A in part 2A tells us that part is about the Adviser and the B in part 2 is about the Bodies (the people) who work there.

Question 3

State-registered IA when to file ADV w/ administrator

Answer 3

Must file a copy of a complete ADV Part 2 with the administrator within 90 days of the end of the adviser’s fiscal year

Question 4

Initial delivery of IA Brochure

Answer 4

• not less than 48 hours prior to entering into any advisory contract w/ such client or prospective client OR
• at time of entering into any such contract— advisory client has a right to terminate the contract w/o penalty within 5 business days after entering into the contract

Question 5

Credit agreement

Answer 5

Loan from the BD to the client w the client’s securities used as collateral

Question 6

Hypothecation Agreement

Answer 6

Loan from a bank to the BD w the client’s securities as collateral for the BD’s loan