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What is the firm K2 Exemption
They can't have any Margin accounts, All transacations must be done in a special account, Promptly forward to the clearing firm
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What does a Member firm do?
They tests its AML Every 2 yrs only if it doesnt act as a introducing broker, Does not execute transactions for customers.
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What is Regulation SP
You can’t hire an Private investigator to obtain nonpubic info about a potential client.
Styles P
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What does an Investment Advisory firm do?
would have to register dually if they offer wrap accounts and charge fees
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What to do when Securities are lost or stolen?
Must be reported within 1 business if found by Also, it must be reported by THE SAME PERSon who called it in TOO. .
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What does a fully disclosed Firm do?
They Holds customer funds, and securities. Clearing B/D has to keep client records
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Non-Financial Info
Cust attitude about RISK!
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SAR - Suspicious Activity Report
How Much?
$5000 OR More - Filled through FinCen (Financial Crimes Enforcement)
_Also Enforces BSA as well.
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What does the Introductory Firms Do?
Min Net Cap = $5000, or $50,000, if the firm accepts customer securities - higher amount applies. 5.8.
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Institutional Investors
- treated as municiaplities,
- 50 Million or Imma quit. Kanye West
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Money Market Accounts
No guarantees but Investors do pay a management fee
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Mutual Fund Rating
You can create your own fund ranking if you provide the catergory, total nmbr of funds and the basis for ranking
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Mutual Funds ranking
Established firms using retail comm. Prepared by firm or invsmtn co. File w/ Finra 10 Days prior to use, RANKING indepent - 10 days after use 4.27
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Suitability for a Variable Annuity
Cash value fluctuates and the annuity payments may go up or down.
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New Firm's 1st Year
Must prefill ALL Retail communication
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Prospectus
not considered a form of communication nor retail communication
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De Minimis
Services 5 or few clients in a given state as long as none of them are investment companies, in any 12 month period.
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EXCLUSIONS
- L Lawyer
- A Accountants
- T Teachers
- E Engineers
- ... Banks and Bank holding Co's
- Advise on US gov't securities only
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Form ADV - Part 1
General Info about the adviser
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Form ADV Part 2
is a Brochure, that's delivered to clients prior to issuing a contract, must be given once a year
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Custodian Job is to
- Safeguard the physical assets
- Perform payable and receivable functions
- register the receipt of interest and dividends
- Custodain does not perform any managment, supervisory or investment functions
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Transfer Agent
Main Job is to perform customer service, Such as clerical work, issue the shares, redeem the shares, distribute the dividends and capital gains
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Exchange of Funds
Always counts as an exchange as a sale and must be reported regardless of gains or loss
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Letter of Intent
good for 13 months, the Investor can also backdate the letter for 90 days
- Only contributions count towards loI, not accumulations.
- All contributions get the discount, if missed fees are billed.
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INTRODUCTING
$5K (CAN'T TAKE $)
$50K (CAN TAKE $ TO PROMPTLY FORWARD)
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Debt to NC Ratio
Established B/d = AI TO NC CAN'T EXCEED 15:1
B/D LESS THAN 1 YR CANT EXCEED 8 TO 1
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