Series 65 Laws, Regulations, and Guidelines

1.Nora charges each neighbor a flat quarterly fee for telling that neighbor which mutual funds to buy. She never places a trade and no advisory firm employs her. Which registration fits Nora?

2.Luis works for Harbor Path Advisers, which is already registered as an investment adviser. He meets clients and recommends portfolios. He earns no commission on trades. Which registration does Luis need?

3.Priya accepts customer orders to buy and sell stocks and is paid a commission on each fill. Any comment she makes is only what is needed to complete that order, and she charges no separate advice fee. Which registration fits her business?

4.Owen, a lawyer, is drafting a will. He mentions once that some families use municipal bonds for estate liquidity. He does not recommend a particular bond, does not manage money, and bills only his usual legal fee. Which outcome fits?

5.Helen Cho edits The Weekly Ledger. Every subscriber receives the same market essay. She never tailors a recommendation to one reader. The paper's only charge is the subscription. Which registration outcome fits Helen's paper?

6.Camille is a partner at a registered advisory firm. She does not meet clients. She hires the representatives, reviews their recommendations, and can override them. Which registration fits Camille?

7.Derek is paid by an advisory firm only when a prospect signs that firm's advisory contract. He does not recommend securities. He sets the meeting and urges the prospect to hire the firm. Which registration fits Derek?

8.Gwen Park, a trust officer, invests trust assets inside North Bridge Bank under the bank's charter. The bank charges its ordinary trust fee and does not hold the desk out as a separate advisory shop. Which outcome fits Gwen's trust work?

9.Hana's only business is introducing buyers and sellers of listed stocks and charging a commission when a trade occurs. She refuses to say whether any stock is a good holding. Which registration fits Hana?

10.Paul runs Pellar Advisers, with $112 million of regulatory assets under management and one office. SEC registration as an adviser applies at $110 million, with a $100 million buffer. Which registration applies to Paul's firm?

11.Adele runs Quinlan Advisers, with $104 million of regulatory assets, and she wants SEC registration. SEC registration applies at $110 million, with a $100 million buffer. Which statement fits Adele's firm?

12.A state treats an adviser with no office there and five or fewer individual clients there as de minimis. Sela has no office in that state, four individual clients there, and $30 million of regulatory assets. Which step does that state require of Sela?

13.A state exempts an adviser with no office there whose only clients in the state are banks. Victor has no office in that state, only two bank clients there, and $45 million of regulatory assets. Which outcome fits Victor?

14.Elena's firm is SEC-registered with $140 million of regulatory assets. She has eight individual clients in a state where she has no office. That state tells federal covered advisers with clients there to file notice and pay a fee, not to complete a second full registration. What should Elena's firm do there?

15.Sam Hart's firm has $108 million of regulatory assets, one office, and retail clients. A colleague says the $100 million buffer means Sam must move to the SEC today. SEC registration applies at $110 million, with a $100 million buffer. Which statement is right?

16.Nia's advisory firm has $80 million of regulatory assets, a home-state office, and retail clients who are not institutions. SEC registration applies at $110 million, with a $100 million buffer. Which registration fits Nia?

17.A state treats no office and five or fewer individual clients as de minimis, and it still requires a federal covered adviser with clients there to notice-file. Omar is SEC-registered with $160 million of assets, no office in the state, and four individual clients there. Which step fits Omar?

18.Mina Rhee's firm has $110 million of regulatory assets on the measurement date and retail clients in its home state. SEC registration as an adviser applies at $110 million, with a $100 million buffer. Which outcome fits Mina?

19.On Tuesday a client signs Iris Lane's advisory contract. Iris mails the brochure on Friday and says the same week is enough. The brochure is due before or at the time the advisory contract is entered. Which statement fits Iris?

20.Jules places the advisory brochure in the client's hands, and then both parties sign. No earlier copy was sent. The brochure is due before or at the time the contract is entered. Which statement fits Jules?

21.Casey Holt offers a wrap program with one asset-based fee covering advice and brokerage. The brochure states the fee, what it includes, and that a client who trades rarely might pay more inside the wrap than by buying the services separately. When must Casey deliver that brochure?

22.Milo files the adviser registration form and gives the client only the pages that list owners and disciplinary events. He holds back the narrative brochure on services, fees, and conflicts. The brochure is due before or at signing, and the client is ready to sign today. Which statement fits Milo?

23.A client signs Lila Voss's wrap contract after reading a brochure that states the single fee, what it includes, and that an infrequent trader might pay less outside the wrap. Lila handed over the brochure at signing. Which statement fits Lila?

24.Pete tells a new client the fee out loud, says the brochure is available if the client asks, and has the client sign with no brochure delivered. The brochure is due before or at the time the contract is entered. Which statement fits Pete?

25.After clients are already under contract, Renee amends her adviser registration because her fee schedule and controlling owner changed. She files the amendment and does not send clients the updated brochure disclosure. Which statement fits Renee?

26.Before any contract is signed, Reed emails the brochure, including his wrap-fee explanation, and the client signs the next morning. The brochure is due before or at signing. Which statement fits Reed?

27.Tom Hale's wrap brochure states a single fee and says trading costs are handled. It never says what the fee buys, and it never says a low-trading client might pay less by purchasing advice and brokerage separately. The client has not signed. Which statement fits Tom?

28.Client checks arrive at Alden Cho's advisory firm, and the clerk deposits them in the same operating account that pays rent and payroll. No custodian bank is involved. Which statement fits Alden?

29.Brett Cole can withdraw client cash for reasons beyond his fee, so he has custody. The securities sit at a registered broker-dealer in client-titled accounts, not in the operating account. An independent accountant conducts a surprise examination. Which statement fits Brett?

30.Belva has custody. Client assets sit at a bank that qualifies as a custodian. No outsider checks the records. Belva's cousin, who keeps the firm's books, signs a letter saying the totals look right. Which statement fits Belva?

31.Dana Ruiz keeps client stock certificates in a safe in her office. She says the safe is safer than a bank and that no surprise exam is needed because clients get a yearly letter from her. Which statement fits Dana?

32.Evan Shaw keeps client cash in a bank account titled for the clients, apart from firm operating funds. The bank is a qualified custodian. Once during the year, on a date Evan does not set, an outside accountant examines the assets. Which statement fits Evan?

33.Fay Ortiz lets client settlement money land in the firm operating account for one night, then sends it to the qualified custodian in the morning. She says a single night is not commingling. Which statement fits Fay?

34.Glen Ives does not keep certificates. The custodian has given him authority to withdraw client cash, and no independent exam has been done. Which statement fits Glen?

35.A qualified custodian holds client assets for Hope Lenn and sends statements straight to the clients. Hope has custody and has arranged an independent surprise examination. She wants to cancel the exam because those statements exist. Which statement fits Hope?

36.Ian Moss is offered a surprise exam by an accountant who also sells Ian tax-planning work and is paid a share of advisory revenue. Client assets are at a qualified custodian and are not in the operating account. Which statement fits Ian?

37.Ken Walsh's ad calls a 22% gain the firm's typical result. That figure is the single best account of forty, and the other accounts are not mentioned. The 22% is also before fees, and the ad never shows the result after fees. Which statement fits Ken?

38.Leah Nguyen's performance ad lists every account in the strategy, shows the composite, and states the return after the advisory fee. No account is highlighted as if it were the whole record. Which statement fits Leah?

39.Nell Ortiz's ad shows only an 11% gain, and that gross figure omits the advisory fee. A client quotation sits beside it and carries the disclosures testimonials require. Testimonials are allowed only when those disclosures are made, not banned outright. Which problem remains in Nell's ad?

40.One household account in Pia Santos's strategy rose 30% last year, and the other nineteen accounts fell. Pia's ad shows only the 30% account under the label of the strategy's result, with no net-of-fee composite. Which statement fits Pia?

41.Ray Dodd's slide shows a 9% gain and labels it what clients earned. The advisory fee on those accounts was 1.2%, and the slide never mentions the fee. The prompt treats 9% as a gross figure that omits the fee. Which statement fits Ray?

42.Sue Berg wants to quote a client's praise in an ad. Testimonials are allowed only when the required disclosures are made, not banned outright. The draft also shows only that client's gain, the highest in the strategy, as the firm's number, and the figure is gross of fees. Which statement fits Sue?

43.Ted Kim's ad table has every account's net return, the composite net return, and a note that the figures are after fees. No single winner is labeled as the whole record. Which statement fits Ted?

44.Uma Shah shows a composite that is net of fees and includes every account in the strategy. A footnote says the gross number is available on request. Which statement fits Uma?

45.Vic Lane drafts two ads. The first shows the strategy composite after fees. The second shows only the three accounts that beat the composite, labels them the strategy, and uses gross returns that omit the fee. Which draft may Vic use?

46.A broker charges commissions on Wes Park's client trades and, in a soft-dollar arrangement, sends Wes research reports that Wes uses to decide those trades. Wes does not use the benefit for rent or personal travel. Which statement fits Wes?

47.Ada Cole uses soft-dollar credits from client commissions to pay the office rent and the electric bill. No research is purchased. Which statement fits Ada?

48.Bea Ruiz pays an accountant a cash referral fee when a client hires Bea. The client receives a written disclosure of that fee and signs it before agreeing to the advisory contract. Which statement fits Bea?

49.Cal Chen uses soft-dollar credits to buy a market-data service. He uses that service only to analyze and monitor client portfolios, not for personal trading or the firm's accounting. Which statement fits Cal?

50.After a client signs and transfers funds, Dee Hart mentions that a neighbor was paid a referral fee. Nothing in writing was given before the client acted. Which statement fits Dee?

51.Eli Foss uses soft dollars from client commissions to pay for a vacation and calls the trip investment perspective. No research and no client tool is purchased. Which statement fits Eli?

52.Fran Goff tells a prospect out loud that a solicitor will be paid. The prospect never receives a written disclosure and then signs the advisory contract the same day. Which statement fits Fran?

53.Gus Hale hands the client a written disclosure of a referral fee, and the client acknowledges it before signing the advisory contract or sending money. The referrer is a consultant, not a research vendor. Which statement fits Gus?

54.Ivy Moss splits soft-dollar credits. Half buys research she uses for client portfolios. Half pays her personal credit-card bill. Which statement fits Ivy?

55.Jo Klein sells a bond from firm inventory to a client. The client learns of that principal role only in a note sent after settlement. A principal trade needs disclosure and the client's consent before the trade. Which statement fits Jo?

56.In the morning, Kit Lane's client reads that Kit will sell the client a bond from firm inventory and signs a consent. The trade is executed that afternoon. A principal trade needs disclosure and consent before the trade. Which statement fits Kit?

57.Lou Mann arranges for client A to buy a stock and client B to sell it, and Lou takes a commission from each. Neither client is told before the trade. An agency cross needs disclosure and each client's consent before the trade. Which statement fits Lou?

58.The day before an agency cross, Ned Ortiz's two clients each sign a consent stating that Ned will act for both sides and will be paid by each. The trade occurs the next day. An agency cross needs disclosure and consent before the trade. Which statement fits Ned?

59.A year ago Ora Peck's client said the client trusted Ora to be fair. Today Ora buys the client's shares into the firm's own account and tells the client the next week. A principal trade needs disclosure and consent before the trade. Which statement fits Ora?

60.Pip Quinn wants to sell a security to a client from inventory at the same price shown on the public market. The client has not been told and has not consented. A principal trade needs disclosure and consent before the trade even when the price matches the market. Which statement fits Pip?

61.Ren Sato gets consent for an agency cross from client A. Client B, the other side, is not told until after the trade. An agency cross needs disclosure and consent from each client before the trade. Which statement fits Ren?

62.Before an order is entered, Sol Tate's client signs a disclosure that Sol is buying the security from the client into the firm's account, and the client consents. The order is entered only after that signature. Which statement fits Sol?

63.Val Unger prepares agency-cross disclosures, executes the cross, and an hour later emails the consents for the clients to sign. An agency cross needs disclosure and consent before the trade. Which statement fits Val?

64.Amy Bell is paid commissions. A retired client asked for a stable, low-turnover account. Amy places dozens of short-term stock trades each month, and commissions consume most of the gains. The client did not ask for that pace. Which label fits Amy's trading?

65.Ben Cruz's client trades for a living, directs frequent turnover, signs an acknowledgment of high commissions, and reviews every order before it is sent. Ben suggests fewer trades. The client refuses and keeps directing the pace. Which statement fits Ben?

66.Cara Diaz sells a private note to a brokerage client and is paid a commission by the issuer. She never tells the employing brokerage and records nothing on the firm's books. Which label fits Cara's sale?

67.Before Dan Cho sells a private placement to a client, he gives the employing firm written notice and receives the firm's written approval. The sale then occurs off the firm's platform, as that approval describes. Which statement fits Dan?

68.Eve Frost learns that a client will enter a large buy order at the open. Eve first buys the same stock in her personal account, then enters the client's order. Which label fits Eve's personal purchase?

69.Gil Hart enters and fills the client's buy order first. Only after that fill does Gil buy a small amount of the same stock personally, with no plan to step in front of the client. Which statement fits Gil?

70.On weekends Hua Ives sells units of a friend's private partnership to people who are also brokerage clients, for a commission, and never notifies the employing firm. Weekday listed business goes through the firm. Which label fits the weekend sales?

71.Jade Kim's firm proprietary desk is told that a client block to buy is about to hit the market. The desk buys the stock for the firm first, and then the client order goes out. Which label fits the desk's purchase?

72.Kyle Lopez and a conservative client agreed to a buy-and-hold bond ladder. Over six months Kyle replaces the ladder with repeated in-and-out stock trades, producing commissions, without a client request for active trading. Which label fits Kyle?

73.Lia Martin borrows $20,000 from Otto, a client who owns a bakery. Otto is not a bank or other lender in the business of making loans. Borrowing from a client is allowed in this prompt only when the client is in that lending business. Lia promises to repay next year. Which statement fits Lia?

74.Mia Nash borrows from a client that is a bank. The bank makes consumer and business loans in the ordinary course, and the loan is on the bank's standard terms. Borrowing from a client is allowed in this prompt only when the client is in the business of making loans. Which statement fits Mia?

75.Ole Park and a client agree by phone to share gains and losses equally. Ole will contribute half the capital. Nothing is in writing. Sharing in a client's account requires the client's written consent and a share that matches the contribution. Which statement fits Ole?

76.Pam Reed's client signs a written consent for Pam to share in the account. Pam will put in 10% of the money and take 50% of the profits, with no share of the losses. Sharing requires written consent and a share in proportion to the contribution. Which statement fits Pam?

77.Rita Snow's client signs a written consent. Rita contributes 30% of the capital and will receive 30% of the gains and bear 30% of the losses. Sharing requires written consent and a share in proportion to the contribution. Which statement fits Rita?

78.After Sam Tate asks a client for spending money, the client, a retired teacher, says to treat $15,000 as a gift Sam need never repay. The teacher is not a lender. Borrowing from a client is allowed in this prompt only when the client is in the business of making loans. Which statement fits Sam?

79.Tina Ullman will absorb half of any account losses, contribute no capital, and take no profits. The client gave oral approval only. Sharing in the account requires written consent and a share in proportion to the contribution. Which statement fits Tina?

80.Before a joint account opens, Uri Vale's client signs a consent. Uri deposits half the starting capital and will take half the gains and half the losses. Which statement fits Uri?

81.Vera Walsh borrows securities from a client's account to cover a personal short sale and returns them a week later. The client is an individual investor, not a firm that lends securities as a business. This prompt treats borrowing client securities like borrowing client money, allowed only when the client is in that lending business. Which statement fits Vera?

82.A finance chief tells college friend Will Yates, before any announcement, that quarterly earnings will miss by a wide margin that would move the share price. Will immediately buys put options on the company. Which statement fits Will?

83.Will Yates does not trade on the unannounced earnings miss. He calls his cousin Zoe and explains the miss, suggesting that Zoe sell. Zoe sells that afternoon. Which statement fits Will?

84.The earnings miss is in a press release and a public filing at 8 a.m. That afternoon, adviser Ben Abel, who read only the public filing and had no earlier tip, sells the stock in client accounts. Which statement fits Ben?

85.A client who sits on a board tells adviser Dean Cho, in confidence, that a merger announcement is set for next week and has not been released. Before the announcement, Dean sells other clients' shares of the target. Which statement fits Dean?

86.Elle Diaz receives the same unannounced merger fact from a director-client. Elle does not trade, does not tell colleagues, and does not tell other clients. The announcement arrives later in a press release. Which statement fits Elle?

87.An engineer tells adviser Finn Eck that a widely sold product will be recalled. The recall is not public, and the engineer says it will sharply cut revenue. Finn buys put options. Which statement fits Finn?

88.A public message board is full of anonymous guesses that a retailer might be sold. No insider has spoken to adviser Gina Falk. Gina buys shares based on those public guesses and on the company's public financial statements. Which statement fits Gina?

89.In a quiet meeting room, Hugo Gill overhears two executives say their company will announce a buyout tomorrow at a large premium. Nothing has been released. Hugo buys the stock before the announcement. Which statement fits Hugo?

90.After receiving material nonpublic news of a pending recall, Kara Holt does not buy or sell. She posts the details in a private group chat of friends who trade, knowing they are likely to sell. Which statement fits Kara?

91.Marin Blake's firm has $150 million of regulatory assets and is registered with the SEC. SEC registration applies at $110 million, with a $100 million buffer. A state demands a full second advisory registration. That state does accept a notice filing from a federal covered adviser. Which statement fits Marin?

92.Noah Ives is state-registered with $40 million of regulatory assets. He refuses a state examiner who asks for trade blotters, client agreements, and cash journals. SEC registration applies at $110 million, with a $100 million buffer. Which statement fits Noah?

93.Paige Jung's firm is registered with the SEC because regulatory assets are $200 million. She tells an SEC examination team to return in two years and declines to produce client ledgers and order records. Which statement fits Paige?

94.Rosa Kane advises in one state with $20 million of regulatory assets and a public website. She claims to be federal covered because people elsewhere can read the site. SEC registration applies at $110 million, with a $100 million buffer. Which statement fits Rosa?

95.Seth Lamb is state-registered. He keeps books in a locked cabinet and will show an examiner only a one-page ad. The examiner asks for the cash journal and the advisory contracts. Which statement fits Seth?

96.Last year Tara Moss had $70 million of regulatory assets and was state-registered. This year the figure is $115 million. SEC registration applies at $110 million, with a $100 million buffer. Which statement fits Tara?

97.Ula Nash has $50 million of regulatory assets and an office in one state. She registers only with the SEC and files nothing with that state. SEC registration applies at $110 million, with a $100 million buffer. Which statement fits Ula?

98.Vern Ortiz is federal covered, with $180 million of regulatory assets, so SEC registration applies under the $110 million rule. The only copies of client agreements and order tickets sit in one employee's personal email, and the employee refuses to export them for an SEC exam. Which statement fits Vern?

99.A state examiner asks state-registered adviser Wade Peck for the blotter, the complaint file, and proof of where client cash is held. Wade offers a sales pamphlet and calls the rest internal. Which statement fits Wade?

100.Maya's investment adviser representative registration expired last month, and she did not renew it. Her new business cards still say she is a registered investment adviser representative. Which statement fits Maya?

101.Chris passed a representative qualification exam three years ago and never applied for registration. His website says he is a registered adviser. Which statement fits Chris?

102.A planning certification stays valid only while dues and continuing education are current. Both lapsed for Ava Quinn in January. In June her site still shows the certification letters beside her name, with no hint that they expired. Which statement fits Ava?

103.Leo withdrew his state adviser registration in March. In May he tells a prospect that he is registered with the state as the prospect's adviser. He has no new approval. Which statement fits Leo?

104.Before her registration's expiration date, Anika files the renewal, pays the fee, and receives written approval continuing the registration with no gap. She keeps describing herself as registered. Which statement fits Anika?

105.A state suspends Bo Reid's representative registration for six months. During the suspension Bo keeps soliciting advisory clients and signing the firm's advisory contracts as the representative. Which statement fits Bo?

106.Jordan's advisory registration has lapsed. Jordan keeps charging clients the advisory fee and describes the service as registered advisory work. No renewal has been approved. Which statement fits Jordan?

107.Cleo Shaw's certification lapsed two years ago. At a seminar Cleo says she held that certification until two years ago and that it is not current. The slide does not show the letters as a present credential. Which statement fits Cleo?

108.After Drew Tate's registration lapses, the email signature still says Drew is a registered investment adviser representative currently serving clients. Drew has filed nothing further. Which statement fits Drew?