Exercise
Answer true or false
- 1. _ An investment adviser with no place of business, 20 institutional clients, and 3 non-institutional clients in State A has to register there.
- 2. _ An investment adviser with no place of business and six non-institutional clients in State A has to register there.
- 3. _ An investment adviser with $200 million assets under management and six non-institutional clients in State A has to register there.
- 4. _ An investment adviser with $75 million in assets under management that is registered in 16 states is allowed to register at the federal level.
- 5. _ To register at the state level, an investment adviser needs to file both a Form ADV and Form U4s for all employees that need to register as investment adviser representatives.
- 6. _ An investment adviser must always have a net worth of at least $35,000.
- 7. _ Investment advisers must keep most records on file for at least 5 years.
- 8. _ A state administrator cannot require an investment adviser to maintain net capital amounts greater than that required at the federal level.
- 9. _ Investment advisers cannot be audited more than once a year.
- 10. _ An adviser’s withdrawal of registration becomes effective as soon as it is filed with the state administrator.
Answers
- 1. False. An investment adviser with no place of business in a state does not have to register there if its clients in that state are institutional clients plus no more than 5 non-institutional clients.
- 2. True. Having any more than five non-institutional clients in a state will require an investment adviser to register there.
- 3. False. An investment adviser with over $110 million in AUM must register at the federal level. Having more than five non-institutional clients in a state would require a notice f