Series 66 Exam: Disclosures & Ethics | Podcast Ep 5

(7) Communication with Clients and Prospects
o Disclosures
o Unlawful representations concerning registrations
o Performance guarantees
o Client contracts (USA § 102, IAA § 205, NASAA Contents of Investment
Advisory Contract Model Rule USA 2002 502(c))
o Correspondence and advertising (e.g., social media, email, website, USA §
403, USA § 405, SEC Rule 206(4)-1, SEC Rule 204-2)
(8) Ethical Practices and Fiduciary Obligations
o Compensation (e.g., fees, commissions, performance-based fees, “pay to
play,” soft dollars, disclosure of compensation, SEA § 28(e), SEC Rule
206(4)-3, SEC Rule 206(4)-5, NASAA Performance-Based Compensation
Exemption for Investment Advisers Model Rule 102(f)-3, MSRB Rule G-37)
o Client funds and securities (e.g., custody, trading discretion, trading
authorizations, prudent investor standards, suitability, anti-money laundering
(Bank Secrecy Act, PATRIOT Act), Uniform Prudent Investor Act,
Suspicious Activity Report (“SAR”) filing requirements, NASAA Agency
Cross Transaction of Investment Advisers Model Rule 102(f)-1)
o Custody conditions and obligations (SEC Rule 206(4)-2, NASAA Custody
Requirements for Investment Advisers Model Rule 102(e)(1)-1, NASAA
Minimum Financial Requirements for Investment Advisers, Model Rule
202(d)-1)
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o Conflicts of interest, criminal activities, fiduciary and other ethical
considerations (e.g., loans to and from clients, sharing in profits and losses in
a customer account, client confidentiality, insider trading, selling away,
market manipulation, personal securities transactions, outside securities
accounts, initial holdings and quarterly reports, political contributions, due
diligence, excessive trading, SEC Rule 204A-1, NASAA Unethical Business
Practices of Investment Advisers, Investment Adviser Representatives, and
Federal Covered Advisers Model Rule, NASAA Dishonest or Unethical
Business Practices of Broker-Dealers and Agents Model Rule 102(a)(4)-1,
NASAA Statement of Policy Regarding Dishonest or Unethical Practices by
Broker-Dealers and Agents in Connection with Investment Company Shares,
NASAA Model Act to Protect Vulnerable Adults from Financial Exploitation)
o Cybersecurity, privacy, and data protection
o Business continuity plans (e.g., disaster recovery, succession planning,
NASAA Model Rule on Business Continuity and Succession Planning, 203(a)-