Final answer:
An individual advising on federal government securities may be considered an investment adviser, subject to regulations and potential exemptions. The Federal Securities Act and the SEC play a key role in defining and regulating the investment industry.
Step-by-step explanation:
If you are advising people strictly on securities issued by the federal government, you may be classified as an investment adviser depending on the scope of your services.
According to the regulations that govern the investment industry, an investment adviser is generally defined as a person or entity that, for compensation, engages in the business of advising others, either directly or through publications or writings, about the value of securities or the advisability of investing in, purchasing, or selling securities.
Individuals or entities that give advice solely on certain government securities may be exempt from registration requirements under certain circumstances, but they may still be considered investment advisers depending on the exact nature of the services they provide.
Following the May 27 legislation, the Federal Securities Act and the establishment of the Securities and Exchange Commission (SEC), the investment industry faced increased regulation to ensure investor protection and market integrity. An understanding of the exemptions and requirements for advising on federal securities is essential for compliance with such regulations.