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IACCP (MASTER TERMS) exam 2023 / 156 questions and answers.
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IACCP (MASTER TERMS) exam 2023 / 156 questions and answers.
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IACCP (MASTER TERMS) examquestions and answers.
Assignment - -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;
2) Services SOLELY Incidental by lawyers, accountants, engineers, teachers, (and)
3) BD advisory services w/out special compensation;
4) Publishers of bona fide newspapers/mags w/Regular Circulation;
5) Advising Direct Obligations of US (bonds);
6) NRSROs (Nationally Recognized Statistical Rating Orgs;
7) Family Offices; and
8) Others designated by SEC rulemaking (such as those otherwise prohibited or exempt)
-Private Fund Adviser Exemption Criteria: - -Advise SOLELY private funds (unlimited)
so long as aggregate assets of such NOT EXCEEDING $150M (per ADV annual
calculation), including Non-US Advisers when ALL US clients are Qualifying Private
Funds
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