Notice Filing vs. State Registration

Notice filing is a topic that often confuses people studying for the Series 63 Uniform Securities Agent State Law exam or the Series 65 Uniform Continue reading

Notice filing is a topic that often confuses people studying for the Series 63 Uniform Securities Agent State Law exam or the Series 65 Uniform Investment Adviser Law exam or the Series 66 Uniform Combined State Law exam. Some mistakenly assume that notice filing is the same as state registration. While there are some similarities, notice filing and state registration are different and the Series 63, Series 65 and Series 66 exams require that you understand the distinction.

So what is notice filing, and how does it work?

To understand the concept of a notice filing, it’s important to know a bit about the entities to which it applies: federal covered advisers and federal covered securities. First, let’s look at federal covered advisers. A federal covered adviser is an SEC-registered adviser that offers investment advice in exchange for compensation. Any adviser with assets under management of $110 million must register as a federal covered adviser.

When it comes to registration, advisers are not subject to double registration, meaning that an investment adviser registered with the SEC does not need to register with any state, and an adviser that is required to register with a state does not register with the SEC. For federal covered advisers, this makes life easier because a federal covered adviser only needs to go through the rigorous registration process one time. Instead of registering in a state, on Form ADV that it files with the SEC, a federal covered adviser lists any states in which it will either have an office or more than five retail clients in a twelve-month period. The SEC then gives notice to the administrator in any state noted on the adviser’s form ADV that the adviser intends to do business in that state. This is a notice filing: a simple heads-up to the state administrator that the advisor will be doing business in its state. Depending on the requirements of the given state, the adviser may be asked to file additional paperwork and pay a fee before offering advice to clients in the state. But, happy day, the adviser gets to skip the state registration process.

Now let’s discuss notice filing for federal covered securities. What is a federal covered security? Well, many of the securities that the average investor is likely to own are federal covered securities. For example, any security traded on an exchange like the NYSE or NASDAQ is a federal covered security. Additionally, securities issued by investment companies that are registered under the Investment Company Act of 1940, such as mutual funds and closed-end funds, are federal covered securities. A federal covered security must be registered with the SEC, but the issuing company is not required to register it with any state. Instead, the issuer must note on its registration statement any state in which it intends to sell the security. The SEC then notifies the administrator of each noted state of the issuer’s intention to sell in that state. Sound familiar? It should because this is also a notice filing: a simple shout-out by the SEC to the state administrator that the security will be sold in its state. Typically the issuer is then required to submit its SEC registration documents to the administrator and pay a filing fee, but, and this is a biggie, the issuer does not need to go through the demanding state registration process in order to sell its securities in the state.

So it’s actually pretty simple. A federal covered security or adviser is registered once with the big boys at the SEC. After that, it’s all smooth sailing. No need for further registration, just a simple notice given to states in which the security will be sold or the adviser will offer investment advice.

Now that you’ve learned the difference between notice filing and state registration, let’s do a practice question to get you ready for the Series 63, Series 65 or Series 66 exam:

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Spencer Investments is a federal covered investment adviser doing business in Oregon. The Administrator in Oregon requires a notice filing. Does this mean Spencer Investments must register in Oregon as well as with the SEC?

A. No. What it means is that Spencer needs to request that the SEC send the Oregon Administrator a copy of Spencer’s Form ADV, and Spencer needs to pay a notice filing fee to the Oregon Administrator.
B. Yes. Spencer does business in Oregon, so it must register in Oregon.
C. Spencer Investments does not have to register in Oregon but does need to fill out and file all the paperwork for registration so the Oregon Administrator is on “notice” regarding Spencer’s business in Oregon.
D. Yes. The Oregon requirements for registration may be more stringent than the SEC’s, so Spencer must comply with them to do business in Oregon.

Correct Answer: A.
No. What it means is that Spencer needs to request that the SEC send the Oregon Administrator a copy of Spencer’s Form ADV, and Spencer needs to pay Oregon a notice filing fee. A notice filing for an investment advisor is not a registration but means the registration papers Spencer Investments filed with the SEC are shared with the Oregon Administrator, and the Oregon Administrator receives a filing fee.

FINRA Extends Open Exam Windows To May 31

In response to the COVID-19 virus, FINRA has announced that it will extend Continue reading

In response to the COVID-19 virus, FINRA has announced that it will extend all exam enrollment windows that are currently open and scheduled to expire by the end of May. Each FINRA-administered exam enrollment end date will be extended through May 31, 2020.

For more information click here.

Prometric Test Centers Closed Until April 16

Solomon Offers Free 30-Day Extensions Continue reading

More Time To Study!

Solomon Offers Free 30-Day Extensions

Prometric has announced that it will close its test centers in the United States and Canada for a period of 30 days, starting today on March 17, due to the Covid-19 disease.  Prometric says it plans on  re-opening test centers effective April 16. 

In response, Solomon Exam Prep will offer a free 30-day extension to customers whose materials expire between March 17 and April 16.  Please call 503 601 0212 or email info@solomonexamprep.com to request your free 30-day extension.

Visit the Prometric website for further information regarding these closures.

The FINRA Series 22: Basic Exam Preparation

Get answers to some of your burning Series 22 questions from Jeremy Solomon, Solomon Exam Prep owner and president, plus test day tips! Continue reading

Did you know that the FINRA Series 22 exam is a much easier path to becoming a direct participation program representative than the Series 7?  A shorter exam requiring less study time, and you’re on your way to being qualified to solicit and sell interests in DPPs, including real estate, oil and gas, equipment leasing, BDCs, agricultural, like-kind exchanges, etc.

Click on the video link above and get answers to some of your burning Series 22 questions from Jeremy Solomon, Solomon Exam Prep owner and president, plus test day tips!

Solomon Live Web Classes Coming Soon….

Solomon Exam Prep’s Live Web Classes give you the opportunity to learn from and interact with an instructor in real time, from the comfort of your own home or office. Our instructors are experts and focus their classes on the aspects that will be most valuable in helping you pass your exam.

Classes are taken online via computer, tablet or smart phone. Internet access is required. The sessions are recorded and made available for later viewing if your schedule prevents you from attending all of the sessions.

Classes coming up in March and April:
Series 7 Top-Off: March 28th & 29th, 10:30 am – 3 pm ET
Series 24: March 30th – April 3rd, 2:30 – 4:30 ET
Series 63: April 2nd, 2 – 3:30 pm ET & April 3rd, 12:00 – 3:30 pm ET
Series 65: March 30th – April 3rd, 12:00 – 3:30 pm ET
Series 66: March 30th – April 3rd, 12:00 – 3:30 pm ET

March Study Question of the Month

This month’s study question from the Solomon Online Exam Simulator question database is now available. Continue reading

This month’s study question from the Solomon Online Exam Simulator question database is now available.

***Submit your answer to info@solomonexamprep.com or comment below to be entered to win a $20 Starbucks gift card.***

In the event of a default on a series of bonds, which of the following actions is a trustee most likely to take?
 
Answers:
 
A. Accelerate the bonds to maturity
 
B. Ensure that the bonds are held by a qualified custodian
 
C. Sue the issuer in civil court
 
D. Postpone the interest payments

Join Solomon’s Upcoming Series 79 Live Web Class!

Calling all lonely Investment Bankers to be! If you’re studying for the FINRA Series 79 exam and you don’t want to do it all by yourself: Solomon Exam Prep to the rescue.  Solomon Exam Prep is pleased to announce a weekend Series 79 exam prep intensive class on February 29 & March 1, 10-2:30 ET. Continue reading

Calling all lonely Investment Bankers to be! If you’re studying for the FINRA Series 79 exam and you don’t want to do it all by yourself: Solomon Exam Prep to the rescue.  Solomon Exam Prep is pleased to announce a weekend Series 79 exam prep intensive class on February 29 & March 1, 10-2:30 ET.

The Series 79 exam requires a broad knowledge of the rules, regulations, and industry practices that govern US capital markets and investment banking. The questions on the exam are drawn from three different subject areas that FINRA deems to represent the major job functions of entry-level investment bankers: 

  • Collection, Analysis, and Evaluation of Data (37 questions)
  • Underwriting/New Financing Transactions, Types of Offerings, and Registration of Securities (20 questions)
  • Mergers and Acquisitions, Tender Offers, and Financial Restructuring Transactions (18 questions)

Solomon recommends studying 80-100 hours over a six-week period. Already studying for the Series 79 and looking for an additional way to boost your learning? Our next Live Web Class for the Series 79 is on February 29th and March 1st and covers everything you need to know to pass the exam. And if you purchase the class as part of a materials package, you receive a discount off the cost of the class! Can’t attend the class in real time? Attendees can access a recording of the class for 15 days. 

To learn more and sign up, go to https://solomonexamprep.com/series777/ or call Customer Service at 503-601-0212.

February Study Question of the Month

Sarah, age 30, wants to begin saving for retirement. She is unmarried and has $5000 to put in a retirement vehicle. Which would be the BEST recommendation for her to invest in. Continue reading

Sarah, age 30, wants to begin saving for retirement. She is unmarried and has $5000 to put in a retirement vehicle. Which would be the BEST recommendation for her to invest in.

  1. Put $2500 in an IRA, and $2500 in a variable annuity
  2. Put all $5000 into an IRA
  3. Put all $5000 into a variable annuity
  4. Put all $5000 into a variable annuity within an IRA

Answer: 3. RMD rules apply to all employer-sponsored retirement plans including 401(k) and 403(b) plans.

Explanation: RMD is determined by the account-holder’s life-expectancy and the age of their beneficiary. The RMD must be drawn from qualified retirement accounts by April 1st of the year following the account holder’s 72nd birthday, unless the account holder turned 70 1/2 in 2019 or earlier, in which case RMDs must start when the account-holder is 70 and 1/2. RMD rules apply to all employer-sponsored retirement plans, including profit-sharing plans, 401(k) plans, 403(b) plans, and 457(b) plans. The RMD rules also apply to traditional IRAs and IRA-based plans such as SEPs, SARSEPs, and SIMPLE IRAs. The RMD rules also apply to Roth 401(k) accounts, which are a hybrid of the Roth IRA and the traditional 401(k) plan. However, the RMD rules do not apply to Roth IRAs while the owner is alive. An account owner may withdraw more than the RMD, the “M“ stands for minimum not maximum. However, RMDs may not be rolled over to a new tax-deferred account.

The University of Dallas Partners with Solomon Exam Prep on SIE Class

The University of Dallas is incorporating Solomon’s SIE materials into its SIE exam prep class. Continue reading

Solomon Exam Prep is pleased to announce that the University of Dallas Executive Education is offering a Spring 2020 SIE Certification Exam Prep Class incorporating Solomon Exam Prep’s Securities Industry Essentials (SIE) exam prep materials. The course will prepare individuals to sit for the FINRA SIE examination and will take place on Thursday evenings from March 5-May 7, 2020.  Brandon Truitt, MS, CFP®, MPAS®, CRPC® is the instructor.