Adviser manages small-cap, large cap and fi portfolios. In a quarterly newsletter to be sent to all clients, Adviser lists the 10 best performing
... [Show More] securities in each portfolio. What must Adviser do in order to distribute the newsletter?
A - Disclose the criteria used to select the 10 best securities.
B - Disclose that Adviser does not imply that it is currently recommending these securities.
C - Offer or include a list of all transactions in these portfolios for the past year.
D - No additional disclosure is needed since a newsletter is not an advertisement. - ANSWER C - Offer or include a list of all transactions in these portfolios for the past year.
Adviser is owned by Local Bank. All of Adviser's clients use Local Bank to custody the assets in their advisory accounts. Pete is Chief Operating Officer (COO) of both Adviser and Local Bank. Which statement is TRUE? Adviser is:
A. - required to get a surprise annual audit and Local Bank is required to provide an internal control report.
B.- not required to get a surprise annual audit but Local Bank is required to provide an internal control report.
C.- required to get a surprise annual audit but Local Bank is not required to provide an internal control report.
D - not required to get a surprise annual audit but Local Bank is required to get a surprise annual audit. - ANSWER A. - required to get a surprise annual audit and Local Bank is required to provide an internal control report.
Which TWO statements accurately describe an adviser's obligations regarding trade errors? (Choose two.)
A - Adviser must notify client promptly when error occurs.
B. - Adviser must make the client whole.
C. - Adviser may not use soft dollars to correct error.
D. - Adviser has 30 days to correct the error. - ANSWER B. - Adviser must make the client whole.
C. - Adviser may not use soft dollars to correct error.
Amendments to Regulation S-P regarding privacy require any adviser that maintains or otherwise possesses consumer report information for a business purpose to:
A. - maintain records of the disposal process for the consumer report information.
B. - maintain the consumer report information for a period of five years.
C. - cease and desist from possessing consumer report information in the future.
D. - properly dispose of the information while protecting it against unauthorized access. - ANSWER D. - properly dispose of the information while protecting it against unauthorized access. [Show Less]