An agency cross is a transaction
in which an investment advisor acts as the broker for both their client and the other party
. These transactions are governed by the Investment Advisers Act of 1940 to ensure advisors act in their clients' best interests rather than their own.
What is agency cross transaction?
An “agency cross transaction” occurs when an investment adviser, acting as broker for a person other than the advisory client,
knowingly makes a sale or purchase of any security for the account of that client
.
Which of the following describes an agency cross transaction quizlet?
An agency cross transaction is
one in which the adviser acts as broker for both sides of the trade
. … Even though a firm may be a federal covered adviser, it does not receive a safe harbor from the antifraud provisions of the Uniform Securities Act.
Which of the following activities is considered a prohibited business practice by a broker dealer?
Under the NASAA Statement of Policy on Dishonest or Unethical Business Practices of Broker/Dealers and Agents, it would be considered a prohibited practice for a broker/dealer to:
Failing to maintain the required net capital
, or failing to register are violations of the law, not a prohibited business practice.
Which of the following is not required to disclosed in an investment advisory contract under the Uniform Securities Act?
Which of the following is NOT required to be disclosed in an investment advisory contract under the Uniform Securities Act? The Uniform Securities Act does not require an investment advisory contract
to disclose the IA's past performance
.
What is an agency transaction?
What are agency transactions? Agency transactions occur
when one NFP (the agent) raises contributions for another NFP (the recipient)
. Contributions received through agency transactions are accounted for under FASB136 and are not recorded as revenue or support on the books of the agent.
Are agency cross transactions legal?
Agency cross transactions tend to occur when a broker receives opposing orders for the same asset. Investment advisors must obtain their clients' approval to engage in these kinds of transactions. Agency cross transactions are
regulated to
make sure there is no conflict of interest on the part of the advisor.
Which of the following are arbitrage transactions quizlet?
Arbitrage transactions profit from price differences and include;
buying and selling the same security simultaneously on two different markets
; buying the stock of a company that is the target of a tender offer while selling the stock of the acquiring company; and buying a convertible security and selling the …
Which statement is true about tips?
Which statement is TRUE about TIPS?
The interest rate placed on a TIPS (Treasury Inflation Protection Security) is less than the rate on an equivalent maturity Treasury Bond
. For example, a 30 year Treasury Bond might have a coupon rate of 4%; but a 30 year TIPS has a coupon rate of 2.75%.
What determines the amount of markup in a principal transaction?
Q: Under the 5% markup policy, which of the following determines the amount of markup in a principal transaction? … Markups are always based
on the inside offer which is the lowest ask price in a particular security
. Markdowns are based on the inside bid which is the highest bid price for a particular security.
Can registered reps buy IPOS?
FINRA Rule 5130
generally prohibits you from buying a new issue (initial public offering or IPO of an equity security) or selling a new issue to “restricted persons” which include other broker-dealers and their employees, as well as portfolio managers, finders and persons acting as fiduciaries for the managing …
What can a Series 6 sell?
With a Series 6 license, you are able to sell
mutual funds, variable annuities, variable life insurance, unit investment trusts (UITs), and municipal fund securities
. The Series 6 is often seen as the ideal companion license for those in the insurance industry.
What is a registered representative of a broker dealer?
A registered representative (RR) is a
person who works for a client-facing financial firm
such as a brokerage company and serves as a representative for clients who are trading investment products and securities. Registered representatives may be employed as brokers, financial advisors, or portfolio managers.
Which of the following would be grounds for the denial revocation or suspension of a registration by an administrator?
Incomplete information on the registration statement,
unreasonable underwriting compensation, failure to pay filing fees, and a security subject to an administrative stop order in federal court
are all grounds for suspension, denial, or revocation of an issuer's registration statement.
Does the fact that an investment adviser is registered in a state mean that the investment adviser is qualified?
Does the fact that an Investment Advisor is registered in a state mean that the Investment Advisor is qualified? [A] Yes,
registration means
that the Investment Advisor is qualified as an IA.
Which of the following actions would be considered a violation of the nasaa Statement of Policy on dishonest or unethical business practices of broker dealers and agents?
Under the NASAA Statement of Policy on Dishonest or Unethical Business Practices of Broker/Dealers and Agents, it would be considered a prohibited practice for a broker/dealer to: …
Failing to maintain the required net capital, or failing to register are violations of the law
, not a prohibited business practice.
