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
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.
What is Regulation SP
You can’t hire an Private investigator to obtain nonpubic info about a potential client.
What does an Investment Advisory firm do?
would have to register dually if they offer wrap accounts and charge fees
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. .
What does a fully disclosed Firm do?
They Holds customer funds, and securities. Clearing B/D has to keep client records
Cust attitude about RISK!
SAR - Suspicious Activity Report
$5000 OR More - Filled through FinCen (Financial Crimes Enforcement)
_Also Enforces BSA as well.
What does the Introductory Firms Do?
Min Net Cap = $5000, or $50,000, if the firm accepts customer securities - higher amount applies. 5.8.
- treated as municiaplities,
- 50 Million or Imma quit. Kanye West
Money Market Accounts
No guarantees but Investors do pay a management fee
Mutual Fund Rating
You can create your own fund ranking if you provide the catergory, total nmbr of funds and the basis for ranking
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
Suitability for a Variable Annuity
Cash value fluctuates and the annuity payments may go up or down.
New Firm's 1st Year
Must prefill ALL Retail communication
not considered a form of communication nor retail communication
Services 5 or few clients in a given state as long as none of them are investment companies, in any 12 month period.
- L Lawyer
- A Accountants
- T Teachers
- E Engineers
- ... Banks and Bank holding Co's
- Advise on US gov't securities only
Form ADV - Part 1
General Info about the adviser
Form ADV Part 2
is a Brochure, that's delivered to clients prior to issuing a contract, must be given once a year
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
Main Job is to perform customer service, Such as clerical work, issue the shares, redeem the shares, distribute the dividends and capital gains
Exchange of Funds
Always counts as an exchange as a sale and must be reported regardless of gains or loss
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.
$5K (CAN'T TAKE $)
$50K (CAN TAKE $ TO PROMPTLY FORWARD)
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