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 the amounts 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 it has no more than five non-institutional clients in the state.
2. True.