SIE Module 10 Test Bank

1. An investment adviser registered with the state wants to take custody of a client’s securities. Which of the following would be required?

2. Which one of the following would be considered a qualified custodian under NASAA rules?

3. Which one of the following represents a requirement that must be satisfied if a registered investment adviser maintains custody of a client’s funds?

4. Rick is an adviser that has discretionary authority over his clients’ securities. Rick, however, does not have custody of the clients’ securities. Rick is required to maintain a minimum net worth balance of:

5. An investment adviser can release confidential client information in all the following circumstances EXCEPT:

6. Robert has been working with Trey, a client, whose main objective is reducing risk in his investment portfolio. Robert informs Trey that in order to accomplish that goal, he first needs Trey to provide him with a copy of his most recent investment statement. Months go by, yet Trey has failed to give Robert a copy of the investment statement. Trey then pressures Robert for a suitable recommendation based on what he has told Robert about the portfolio. Of the following options, which action should Robert take?

7. Jake has a Series 7 license and can sell annuities exclusively from The Annuity Company. Jake reviewed data gathered from his engagement with a new client, Marie. Marie is currently 61 years old, is risk averse, and has indicated that she will need an income stream in four years. Jake disclosed to Marie that he only sells annuities from The Annuity Company, and he is compensated for these sales. Jake suggested she purchase a flexible-premium fixed annuity with a 7% commission. Was Jake’s recommendation suitable?

8. Which one of the following would represent a violation of the suitability rule?

9. Which one of the following statements is correct regarding anti-money laundering regulations?

10. U.S. financial institutions are required to file a currency transaction report with FinCEN for each deposit, withdrawal, exchange of currency, or other payment which involves a transaction in currency of more than:

11. NASAA Recordkeeping Requirements For Investment Advisers Model Rule requires investment advisers to keep a memorandum of each order given by the investment adviser for the purchase or sale of any security. For a transaction involving the purchase of a security, the memorandum must include:

12. Investment Advisers are required to retain most of their records for a period of:

13. Broker/dealers are required to retain most of their records for a period of:

14. The NASAA Model Rule on Business Continuity and Succession Planning is designed to:

15. Which one of the following represents a common form of money laundering in which the criminal breaks up large amounts of cash into multiple small deposits then spreads them over many different accounts to avoid detection?

16. Which one of the following most accurately represents money laundering?

17. To obtain a money laundering conviction, which one of the following must be proven?

18. Which one of the following represents a common form of money laundering in which the criminal conceals the source of the money through a series of transactions and bookkeeping deception?

19. U.S. financial institutions are required to file a currency transaction report with FinCEN for each deposit, withdrawal, exchange of currency, or other payment which involves a transaction in currency of more than:

20. Which one of the following statements is correct regarding a currency transaction report (CTR)?

21. Which one of the following forms must be submitted by a financial firm to the FinCEN within 30 days of observing a person’s suspicious action?

22. The primary purpose of the Financial Crimes Enforcement Network (FinCEN) is to:

23. All of the following statements are correct regarding the Financial Crimes Enforcement Network (FinCEN), EXCEPT:

24. In which one of the following situations would a suspicious activity report most likely be required?

25. Which one of the following is a financial intelligence and enforcement agency of the U.S. Treasury Department that administers and enforces economic and trade sanctions?

26. Which one of the following statements is correct regarding the books and records retention requirements for member broker/dealers?

27. Under the 1934 Act, a customer must be provided with a confirmation document at or before the fulfillment of any order. However, the confirmation document is not required with respect to a transaction involving a:

28. A firm is permitted to hold customer mail:

29. Which one of the following statements is correct regarding a business continuity plan?

30. Which one of the following statements is correct regarding the privacy rules of Regulation S-P?

31. Which one of the following would be considered nonpublic personal information?

32. In November, a broker/dealer sent an email to 20 retail investors. The email is classified as:

33. Which one of the following statements is correct regarding rules related to communication with the public?

34. The FTC’s Do-Not-Call list is intended to prevent calls from:

35. All of the following statements are correct regarding FINRA Suitability Rules applicable to broker/dealers, EXCEPT:

36. Which one of the following statements is correct regarding a broker/dealer’s responsibilities under the FINRA Suitability Rules?

37. Which one of the following represents a set of standards used within the investment and financial services industry to verify customers, their risk profiles, and financial profile?