Laws & RegulationsQuestion 27 of 100
An investment adviser exercises discretion in a client account. Under the Uniform Securities Act, this generally requires:
a.Prior written discretionary authority from the client
b.Nothing beyond a verbal understanding
c.Only the Administrator's approval
d.A performance guarantee
Explanation
Exercising discretion in a client's account requires written discretionary authorization from the client. For investment advisers, oral discretion may be permitted for a limited initial period regarding price and time only, but full discretion needs written authority. This protects clients from unauthorized transactions.
Law Reference: Uniform Securities ActPractice all 100 questions free — no signup required.
Related questions on this topic
- An agent guarantees a customer against loss on a stock recommendation to close the sale. This practice is:
- Under the Uniform Securities Act, the statute of limitations for a purchaser to bring a civil suit for a violation is generally:
- A remedy available to a defrauded purchaser under the civil liability provisions of the Act typically allows recovery of:
- NASAA's model rule on unethical business practices of investment advisers would consider which of the following a violation?
- Which threshold generally determines whether a mid-sized adviser registers with the SEC rather than the states?
- An agent effects a transaction that is not recorded on the books of the employing broker-dealer, without the firm's knowledge or authorization. This is best described as:
Last reviewed: · editorial process
PrepPass Editorial Team · Verified against NASAA Series 66 Uniform Combined State Law Exam · How we review