Question

A state-regulated IA falls below the minimum financial requirements. What are the next 2 steps, and what day do they occur?

A) 1. The IA is immediately shut down; 2. The next business day.
B) 1. The IA is given a warning; 2. Within 30 days.
C) 1. The IA must notify clients; 2. Within 45 days.
D) 1. The IA must submit a notice to the state regulator; 2. Promptly, upon discovering the deficiency.

Answer 1

A state-regulated Investment Adviser must promptly notify the state regulator upon discovering that it has fallen below the minimum financial requirements. These actions should occur immediately and without delay.

Step-by-step explanation:

When a state-regulated Investment Adviser (IA) falls below the minimum financial requirements, the next two steps according to the Uniform Securities Act are: 1.

The IA must submit a notice to the state regulator; 2. Promptly, upon discovering the deficiency. This means that as soon as the IA becomes aware that they are below the required financial thresholds, they must immediately inform the state regulator.

There's no specific time frame given other than 'promptly,' but this implies without unnecessary delay.

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