Investment Adviser Regulation

# Investment Adviser Regulation — Series 66 ## Overview This lesson covers the regulatory framework governing investment advisers (IAs) and investment adviser representatives (IARs) as tested on the Series 66 exam. This content falls within Section IV (Laws, Regulations & Guidelines), which accounts for 45% of the Series 66 exam — approximately 45 of 100 scored questions. [Source: NASAA Series 66 Exam Content Outline, effective 2023-06-12; series66/topic_weights/laws_regulations] Because Series 66 candidates are qualifying as IARs (in addition to BD agents), they need precise command of registration requirements, registration mechanics, and the ongoing obligations that come with IA status. --- ## What Is an Investment Adviser? The ABC Test determines whether a person or firm qualifies as an investment adviser. All three prongs must be present: | Prong | Question | |---|---| | A — Advice | Does the person advise on securities or issue securities-related reports/analyses? | | B — Business | Is advising a regular part of a commercial business activity? | | C — Compensation | Is the person compensated in any form for that advice? | If all three apply, the person is an investment adviser — unless an exclusion or exemption applies. ### Exclusions vs. Exemptions - Exclusion = not an investment adviser by definition (e.g., lawyers giving incidental legal advice about securities) - Exemption = is an investment adviser by definition but does not have to register (e.g., certain private fund advisers) > Critical: Exempted advisers still owe fiduciary duties and are subject to antifraud…