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Series 65 · 30% of the exam

Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices practice questions

10 free Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices questions for the Uniform Investment Adviser Law Exam (Series 65) exam, each with the correct answer and an explanation for every option.

Start the questionsFree 10-question Series 65 quiz

What this domain covers

One of the two largest Series 65 domains: the Uniform Securities Act and federal rules governing advisers, their registration and the conduct that counts as unethical or fraudulent.

Exam weight
30%
On a real exam
≈ 42 questions
In our bank
180 questions

Topics that come up most

  • Definitions of adviser, representative, agent and broker-dealer
  • State and federal registration and exemptions
  • Administrator powers and penalties
  • Fiduciary duty, custody and fee rules
  • Prohibited and unethical business practices

How to study it

Learn the definitions and their exclusions word for word, then sort which advisers register with the SEC and which with the state; much of the domain depends on getting those right.

Sample Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices questions

Try each one before opening the answer. Original questions written to the official exam objectives.

  1. Question 1

    Under the Uniform Securities Act, a client's civil suit must be brought within 3 years of the violation or within how long of discovering it, whichever is earlier?

    • A10 years
    • B6 months
    • C2 years
    • DNo limit
    Show answer and explanation

    Answer: C) 2 years

    • AIncorrect. The period is 2 years.
    • BIncorrect. The period is 2 years.
    • CCorrect. The earlier deadline applies.
    • DIncorrect. Limits apply.

  2. Question 2

    An issuer is conducting a Regulation D offering. On March 3, the first investor signs a subscription agreement that irrevocably commits the investor to invest. The investor's funds arrive March 10, and the offering closes June 30. When is the issuer's Form D generally due?

    • AWithin 15 days after March 10, when the investor's funds are received
    • BWithin 15 days after March 3, when the investor became irrevocably committed
    • CWithin 15 days after June 30, when the offering is completed
    • DBefore the issuer makes its first offer to any prospective investor
    Show answer and explanation

    Answer: B) Within 15 days after March 3, when the investor became irrevocably committed

    Form D must be filed within 15 days after the first sale. The first sale is the date the first investor is irrevocably contractually committed to invest. If the deadline falls on a weekend or holiday, it moves to the next business day.

    • AIncorrect. The date of first sale is when the investor becomes irrevocably contractually committed, not when the funds arrive.
    • BCorrect. Form D is due within 15 days after the first sale. The SEC treats the first sale as the date the first investor is irrevocably contractually committed to invest.
    • CIncorrect. The deadline is measured from the first sale, not from the end of the offering.
    • DIncorrect. Form D is not a pre-offer filing. It is due after the first sale.

  3. Question 3

    An IAR regularly meets clients at a home office. For registration purposes, the home office is a:

    • APrivate residence only
    • BPlace of business
    • CExempt location
    • DBranch of the SEC
    Show answer and explanation

    Answer: B) Place of business

    • AIncorrect. It counts as a place of business.
    • BCorrect. Any location held out for advisory business counts.
    • CIncorrect. It counts as a place of business.
    • DIncorrect. That isn't relevant.

  4. Question 4

    An SEC-registered adviser need not deliver its brochure to clients receiving only impersonal advice for less than:

    • AAny amount
    • B$50,000 a year
    • C$5 a year
    • D$500 a year
    Show answer and explanation

    Answer: D) $500 a year

    • AIncorrect. The threshold is $500.
    • BIncorrect. The threshold is $500.
    • CIncorrect. The threshold is $500.
    • DCorrect. This is a delivery exception.

  5. Question 5

    Under the Securities Exchange Act of 1934, the SEC regulates:

    • ASecondary market trading, exchanges and broker-dealers
    • BOnly new securities offerings by issuers
    • COnly mutual funds and their advisers
    • DCommodity futures exchanges and the trading of agricultural contracts
    Show answer and explanation

    Answer: A) Secondary market trading, exchanges and broker-dealers

    • ACorrect. The 1933 Act covers new issues.
    • BIncorrect. That's the 1933 Act.
    • CIncorrect. That's the 1940 Acts.
    • DIncorrect. That's the CFTC.

  6. Question 6

    An IAR of a federal covered adviser with a place of business in a state may be required by that state to:

    • ARegister
    • BFile Form ADV
    • CMeet net worth tests
    • DDo nothing
    Show answer and explanation

    Answer: A) Register

    • ACorrect. States regulate IARs with in-state offices.
    • BIncorrect. The firm files Form ADV.
    • CIncorrect. Those apply to firms.
    • DIncorrect. Registration may be required.

  7. Question 7

    Under the Compliance Rule (Rule 206(4)-7), which of the following must an SEC-registered investment adviser do?

    • AReview its compliance policies and procedures at least quarterly
    • BDesignate a supervised person as chief compliance officer to run the policies
    • CFile its written compliance policies and procedures with the SEC each year
    • DHire an independent outside firm, not a supervised person, as its compliance officer
    Show answer and explanation

    Answer: B) Designate a supervised person as chief compliance officer to run the policies

    Rule 206(4)-7 requires an SEC-registered adviser to adopt and implement written compliance policies and procedures, review them at least annually, and designate a supervised person as chief compliance officer to administer them.

    • AIncorrect. The rule requires a review at least annually, not quarterly.
    • BCorrect. The adviser must designate an individual who is a supervised person to be responsible for administering its written policies and procedures.
    • CIncorrect. The adviser must adopt and implement written policies and procedures. The rule doesn't require filing them with the SEC.
    • DIncorrect. The chief compliance officer must be a supervised person of the adviser, not an independent outside firm.

  8. Question 8

    Under NASAA's 2019 model rule on investment adviser information security and privacy, a state-registered adviser's written physical security and cybersecurity policies must be:

    • ADesigned to protect the confidentiality, integrity, and availability of records
    • BIdentical for every adviser, following one state-prescribed encryption standard
    • CCertified each year by an independent, state-approved cybersecurity auditor
    • DLimited to paper records kept offline at the adviser's principal office
    Show answer and explanation

    Answer: A) Designed to protect the confidentiality, integrity, and availability of records

    NASAA's 2019 information security model rule requires written, tailored physical security and cybersecurity policies reasonably designed to ensure the confidentiality, integrity and availability of client records and information.

    • ACorrect. The model rule requires written physical security and cybersecurity policies reasonably designed to ensure the confidentiality, integrity and availability of physical and electronic records and information. The policies must be tailored to the adviser's size, services and number of locations.
    • BIncorrect. The rule requires policies tailored to the adviser's business model, including its size, services and locations. It does not set a single uniform standard.
    • CIncorrect. The model rule requires the adviser to establish, implement, update and enforce its own policies. It does not require annual third-party certification.
    • DIncorrect. The policies must cover both physical and electronic records and information, and the recordkeeping rule allows copies to be stored on electronic media.

  9. Question 9

    The Advisers Act's antifraud provisions apply to:

    • AOnly SEC registrants
    • BAll advisers
    • COnly state registrants
    • DOnly large firms
    Show answer and explanation

    Answer: B) All advisers

    • AIncorrect. They apply broadly.
    • BCorrect. They apply even to exempt advisers.
    • CIncorrect. They apply broadly.
    • DIncorrect. They apply broadly.

  10. Question 10

    Under the Advisers Act, an adviser trading with a client from its own account must disclose its capacity and get consent:

    • AOnce each year
    • BFor each trade
    • CNever at all
    • DOnly for large trades
    Show answer and explanation

    Answer: B) For each trade

    • AIncorrect. Consent is needed for each trade.
    • BCorrect. Consent is required trade by trade before completion.
    • CIncorrect. Consent is required.
    • DIncorrect. Every principal trade needs it.

Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices: FAQs

How much of the Series 65 exam is Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices?

Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices is 30% of the Series 65 exam by the official exam guide's weighting, which on a 140-question form works out to roughly 42 questions. The real exam's exact split varies by form.

What does the Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices domain cover?

One of the two largest Series 65 domains: the Uniform Securities Act and federal rules governing advisers, their registration and the conduct that counts as unethical or fraudulent.

How should I study Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices for Series 65?

Learn the definitions and their exclusions word for word, then sort which advisers register with the SEC and which with the state; much of the domain depends on getting those right.

Where can I practise more Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices questions?

This page has 10 free Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices questions with answers. The ExamWize Series 65 question bank has 180 questions in this domain. Every practice exam result breaks your score down by domain, and Review Mode re-drills the questions you missed.

Other Series 65 topics

Also: 15 free questions across all topics, the Series 65 cheat sheet and the study guide.

Get Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices exam-ready

The full Series 65 bank has 180 Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices questions. Timed practice exams match the real exam's length and domain weights, every result shows your score per domain, and Review Mode re-drills the questions you missed.

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Not affiliated with NASAA; questions are original, written from the official exam outline, and never copied from the real exam.