Question of the Week

Under the Uniform Securities Act, which of the following actions is permitted for a registered sales representative?

a) Make trades in a state where the sales representative is registered, but the broker-dealer is not.
b) Make trades in a state where the sales representative is not registered, as long as the broker-dealer is registered in that state.
c) Solicit trades for non-exempt unregistered securities, as long as the sales representative is registered in the state.
d) Offer investment advisory services as long as no separate fee is charged and the services are incidental to his or her brokerage services.

Answer:

The correct answer is d).

A sales representative may not make trades in a state unless both the sales representative and the broker-dealer are registered in the state. In addition, they may not solicit trades for non-exempt unregistered securities, (although it is permitted for unregistered exempt securities such as municipal bonds).

A sales representative is permitted to provide investment advisory services, as long as no separate fee is received and the services are incidental to the brokerage services.



Professionals FAQs
  1. Where can I look for a financial planner?

    References from trusted friends or family members can help you find a financial planner; however, keep in mind that your friends' financial situations and goals may differ from yours and, therefore, their planners won't necessarily be the best fit for you.The Certified Financial Planner (CFP) Board of Standards certifies financial planners and maintains an online list of certified financial planners on its CFP Board of Standards website.
  2. If I am looking to get an Investment Banking job. What education do employers prefer? MBA or CFA?

    If you are looking specifically for an investment banking position, an MBA may be marginally preferable over the CFA. The caveat here is that the MBA would most probably need to be from a Top-20 B-School.The Chartered Financial Analyst (CFA) is well worth considering if you (a) are aiming for an entry-level position in investment banking, and/or (b) cannot afford to shell out six figures for an MBA or have to settle for a lesser-known B-school.That's because in the investment banking field, most entry-level positions are at the analyst level.
  3. Can I still pass the CFA Level I if I do poorly in the ethics section?

    You may still pass the Chartered Financial Analysis (CFA) Level I even if you fare poorly in the ethics section, but don't count on it. The CFA Institute has long emphasized that ethics is a particular area of focus for it. The seriousness with which the CFA Institute views ethics is evident from the fact that for exam candidates with borderline total scores, performance on the ethics section can mean the difference between passing and failing the exam.
  4. Under the USA, registration as an IAR includes all of the following EXCEPT:

    Under the USA, registration as an IAR includes all of the following EXCEPT: A. Minimum net capitalB. Passing a qualification examC. Filing a consent to service of processD. Posting a surety bond The correct answer is "A", since only an IA would need to prove minimum net capital requirements.