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IACCP (MASTER TERMS) – 156 Q’S AND A’S
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IACCP (MASTER TERMS) – 156 Q’S AND A’S
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IACCP (MASTER TERMS) – 156 Q’S AND A’SAssignment - -Any direct or indirect transfer or hypothecation of an
investment advisory contract by the assignor
-Who is not an Investment Advisor? - -A Bank, Lawyer, accountant,
engineer, teach whose performance of such services is solely incidental to
the practice of his profession, Broker-dealer (commission only)published of
any bona fide newspaper, magazine, business publication, rating systems
(Moodys, etc.)
-What does it mean when someone has "Control"? - -Power to exercise a
controlling influence over the management or policies of a compny
-Investment supervisory services - -Giving of continuous advice as to the
investment of funds on the basis of the individual needs of each client
-National securities exchange - -an exchange registered under section 6 of
the Securities Exchange Act of 1934
-Person - -Natural person or company
-Not Securities - -Commodity Futures, Fixed Annuities
-Securities Act of 1933 Securities Exchange Act of 1934 Trust Indenture Act
of 1939 - -Acts respectively, heretofore or hereafter amended
-What is a Business Development Company? - -A company must be
registered in compliance with Section 54 of the Investment Company Act of
1940 to qualify as a BDC. A major difference between a BDC and a venture
capital fund is that BDCs allow smaller, non-accredited investors to invest in
startup companies.
A BDC is a type of closed-end fund that makes investments in developing
companies and firms that are financially distressed.
-What is an underwriter? - -Works closely with the issuing body to
determine the offering price of the securities, buys them from the issuer, and
sells them to investors via the underwriter's distribution network.
Underwriters generally receive underwriting fees from their issuing clients,
but they also can earn profits when selling the underwritten shares to
investors.
-What is a Foreign Private Advisor? - -No US, fewer than 15 clients in US in
private funds, aggregate assets under management US clients in private
funds of less than $25 million. Does not hold self out in the US public as an
,Investment Adviser; nor acts as An Investment Adviser to any investment
company registered under the Investment Company Act of 1940
-What is a Commodity Pool Operator (CPO)? - -A CPO is an individual or
organization which operates a commodity pool and solicits funds for that
commodity pool.
-What is a Commodity Pool? - -An enterprise in which funds contributed by a
number of persons are combined for the purpose of trading futures
contracts, options on futures, retail off-exchange forex contracts or swaps, or
to invest in another commodity pool.
-What is a Commodity Trading Advisor (CTA) - -A US financial regulatory
term for an individual or organization who is retained by a fund or individual
client to provide advice and services related to trading in futures contracts,
commodity options and/or swaps. They are responsible for the trading within
managed futures accounts.
-What is a Swap - -A derivative contract through which two parties
exchange financial instruments. These instruments can be almost anything,
but most swaps involve cash flows based on a notional principal amount that
both parties agree to. Usually, the principal does not change hands. Each
cash flow comprises one leg of the swap. One cash flow is generally fixed,
while the other is variable, that is, based on a a benchmark interest rate,
floating currency exchange rate or index price.
The most common kind of swap is an interest rate swap. Swaps do not trade
on exchanges, and retail investors do not generally engage in swaps. Rather,
swaps are over-the-counter contracts between businesses or financial
institutions.
-What is a Swap Dealer? - -An individual who acts as the counterparty in a
swap agreement for a fee called a spread. Swap dealers are the market
makers for the swap market. The spread represents the difference between
the wholesale price for trades and the retail price. Because swap
arrangements aren't actively traded, swap dealers allow brokers to
standardize swap contracts to some extent.
-What is Swap Execution Facility? - -A platform for financial swap trading
that provides pre-trade information (i.e. bid and offer prices) and a
mechanism for executing swap transactions among eligible participants.
-Penalties - -1st Tier - Max Penalty for each act $5,000/natural person or
$50,000 for any other person
2nd Tier $50,000 for each act or omission natural person or $250,000 for any
other person (Fraud, deceit, manipulation or deliberate or reckless disregard)
, 3rd Tier $100,000 each act natural person or $500,000 for any other person
(Fraud, deceit, manipulation or deliberate or reckless disregard, and if
substantial losses or created a significant risk of substantial losses to other
persons)
-Violations could result in - -Accounting and disgorgement
Cease and Desist Proceedings
Hearing
Temporary Order
-Investment Advisor - -An investment advisor is defined by the Investment
Advisors Act of 1940, as any person or group that makes investment
recommendations or conducts securities analysis in return for a fee, whether
through direct management of client assets or via written publications.
-Who are Advisory Affiliates? - -(1) all of your officers, partners, or directors
(or any person performing similar functions);
(2) all persons directly or indirectly controlling or controlled by you; and
(3) all of your current employees (other than employees performing only
clerical, administrative, ...
-What AUM requires SEC Registration? - -Over $100 Million
-What is an "Investment Advisor? - -Person/firm compensated for engaging
in business of (directly or indirectly) advising others on securities or the
advisability of investing (or) who issues analysis/reports concerning
securities
-When is SEC Registration Required? - -1) definition of "IA" is met (unless
otherwise excepted from definition or exempt/prohibited from registration);
AND $100M in AUM (optional for Mid-Sized Advisers AUM $100-115M Buffer
Zone)
- OR -
2) when ADVISING a Registered Investment Company
- OR -
3) AUM $25-100M AND NOT registered/required to register with State OR
NOT Subject to EXAMS by State
Registration withdraw required for AUM under $90M
-Who is EXCLUDED from Definition of "IA"? - -1) Domestic banks and bank
holding companies;
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