Question

It is a fraudulent, deceptive, or manipulative act, practice, or course of business within the meaning of section 206(4) of the Adviser Act, to exercise voting authority with respect to client securities, unless the adviser:

a. adopts and implements written policies and procedures that are reasonably designed to ensure that the adviser votes client securities in the best interest of clients, which procedures must include how the adviser addresses material conflicts that may arise between its interests and those of its clients.
b. manages more than $1 billion in assets.
c. serves only sophisticated investors.
d. is affiliated with a broker-dealer.

Answer 1

The subject of this question is Law, specifically related to the Adviser Act. The correct answer is option a which explains the criteria an adviser must meet to avoid fraudulent, deceptive, or manipulative acts related to exercising voting authority with respect to client securities.

Step-by-step explanation:

The subject of this question is Law. Section 206(4) of the Adviser Act defines certain acts as fraudulent, deceptive, or manipulative within the investment advisory business. One of these acts pertains to the exercise of voting authority with respect to client securities. To avoid engaging in such acts, an adviser must fulfill certain criteria as listed in the options provided.

The correct answer is a. adopts and implements written policies and procedures that are reasonably designed to ensure that the adviser votes client securities in the best interest of clients, which procedures must include how the adviser addresses material conflicts that may arise between its interests and those of its clients. This means that the adviser must have established policies and procedures that prioritize the clients' best interests and include mechanisms for handling conflicts of interest.