One-Page Cheat Sheet

This is the whole book at a glance, ordered to match the NASAA test specifications. It assumes you have already worked through the units; each line is a memory jog, not a first lesson. If a line reminds you that you forgot something, go back to that unit's rapid-fire sheet.

Regulations of Investment Advisers (5%)

• Definitions of Investment Advisers: An investment adviser gives Advice about securities, as a Business, for Compensation, and missing any one prong means no IA. L.A.T.E. professionals whose advice is solely incidental, banks, broker-dealers with incidental uncompensated advice, and impersonal publishers are excluded from the definition. Advisers with no in-state office who are either institutional-only or de minimis are merely exempt from registration. Excluded and exempt persons alike remain bound by the antifraud provisions, which reach anyone paid for securities advice. Register with Form ADV plus a once-filed irrevocable consent to service of process; state versus federal turns on assets under management, and federal covered advisers only notice-file. Registered advisers also face ongoing financial, bonding, recordkeeping, disclosure, and examination duties.

Regulations of Investment Adviser Representatives (5%)

• Definition of an Investment Adviser Representative: An investment adviser representative is an individual who performs any one of five functions (advises, manages accounts, determines advice, solicits, or supervises those who do) for a registered investment adviser or federal covered adviser, and only clerical staff and non-securities advisers are excluded. IARs register on Form U4 through their sponsoring firm, file an irrevocable consent to service, and go effective at noon on the 30th day after passing the Series 65 or the Series 66 plus Series 7 path. An IAR of a federal covered adviser still registers with each state where they keep a place of business, and the same denial and revocation grounds that apply to agents apply to IARs.

Regulations of Broker-Dealers (12%)

• Broker-Dealer Agent Supervision: Every broker-dealer must run a supervisory system reasonably designed to catch violations, written down as procedures naming who reviews what and how often, tested by principals and certified annually by the CEO. Offices split into supervisory jurisdictions inspected annually, and branch offices inspected at least every three years unless they supervise a non-branch location. Failure to reasonably supervise stands on its own and reaches responsible partners, officers, and directors, and the only defense is procedures in place, reasonably enforced, and a violation that happened anyway despite good-faith effort.
• Definition of a Broker-Dealer: A broker-dealer effects securities transactions for others as a broker earning a commission, or for its own account as a dealer earning a markup or markdown, and most firms are both. Agents, issuers, banks, savings institutions, and trust companies are excluded outright, though a bank holding company is not. A firm with no in-state office escapes the definition only by dealing exclusively with institutions or by qualifying as a snowbird serving an existing out-of-state customer, and any in-state office forces registration regardless.
• Registration and Post-Registration Requirements: A broker-dealer registers in each state on Form BD with an irrevocable consent to service of process that never renews, becoming effective at noon on the thirtieth day and expiring every December 31. While registered it owes prescribed records, financial reports capped by the federal standard, and examination at any time without a subpoena. Denial, suspension, revocation, bar, censure, and restriction each need the public interest and a statutory ground, while cancellation is pure housekeeping, and a withdrawal takes thirty days and stays reachable for a year.

Regulations of Agents of Broker-Dealers (13%)

• Definition of an Agent of a Broker-Dealer: An agent is an individual, never a firm, who represents a broker-dealer or issuer in effecting or attempting to effect securities transactions, and a partner or officer becomes one only by actually transacting rather than by title. Clerical and back-office staff are excluded, while a broker-dealer representative handling public business essentially always registers. An issuer's representative escapes only through a narrow list: five exempt-security categories, exempt transactions, federal covered securities limited to qualified-purchaser sales and accredited private placements, and no-commission sales to existing employees, which any commission tied to soliciting destroys.
• Registration and Post-Registration: An agent registers on Form U4 through the employing firm, with an irrevocable consent to service of process, effective at noon on the thirtieth day and expiring every December 31. The registration belongs to one employer, goes inactive the moment the agent leaves, and demands three separate notifications on any firm change, while a felony charge alone forces a prompt correcting amendment. An agent carries no capital requirement at all, though custody or discretion can still require a bond, while discipline needs the public interest plus a ground, cancellation needs neither, and a withdrawal takes thirty days but leaves a full year of exposure for willful violations.

Regulations of Securities and Issuers (9%)

• Definition of Securities and Issuers: A person is nearly anyone or any entity, including a government; capacity to contract is a separate question, so the Act does not carve out a minor, a deceased, or a mentally incompetent individual. A security is broad; the four-prong Howey Test (investment of money in a common enterprise expecting profit from others' efforts) captures investment contracts, and all four prongs must hold. Variable insurance, pooled interests, and receipts for deposited securities are securities; fixed insurance, commodities, direct real estate, and bank CDs are not. Both offers and sales trigger the Act, bonus and assessable-stock gifts count as sales, and issuer versus non-issuer turns on whether the issuer directly or indirectly benefits, not merely who is paid.
• Exemptions from Registration: A security is lawful in a state only if it is registered, a federal covered security, or exempt. An exempt security (government, bank, insurance stock and bonds, nonprofit, commercial paper) stays exempt in any trade; an exempt transaction (isolated non-issuer, unsolicited order, institutional buyer, fiduciary, private placement to 10 or fewer offerees in 12 months) exempts only that specific sale. Federal covered securities are preempted from state registration, and most (fund shares, qualified-purchaser sales, the uncapped Regulation D tier) still owe a notice filing and fee, while exchange-listed ones owe nothing at all: no filing, no fee, no stop order. The Administrator cannot revoke government, financial-institution, or commercial-paper exemptions, and no exemption ever shields fraud.
• State Enforcement and Antifraud Authority: The Uniform Securities Act of 1956 as amended by NASAA is the model blue-sky law each state adopts to police securities transactions, professionals, and offerings. Jurisdiction attaches when an offer is made in the state, or is made and accepted there, so both states can reach one transaction. The antifraud provision covers every offer, sale, and purchase of any security and has no exemptions at all.
• State Registration and Post-Registration Requirements: No security is offered or sold in a state unless it is registered, exempt, or federal covered. Filing suits seasoned issuers (toughest eligibility, easiest procedure) and coordination suits anyone registering federally at the same time; both ride the federal registration's effectiveness, except filing's second route for open-end funds and unit investment trusts, which goes effective on the business day of filing or when the existing registration expires, whichever is last. Qualification needs no federal filing and takes effect only when the Administrator orders. Across all methods, registration lasts one year, reports come no more than quarterly, and escrow reaches coordination and qualification but never filing. Federal covered securities skip state registration but keep state anti-fraud exposure.

Remedies and Administrative Provisions (11%)

• Administrative Actions: The Administrator alone issues cease and desist orders with or without a hearing, summarily suspends a registration pending determination, and stop-orders securities registrations. Every denial, suspension, or revocation needs the public interest and a statutory ground together, with notice and written findings, while cancellation is mere housekeeping. Only a court enjoins or orders money, and an appeal never stays the order.
• Authority of the State Securities Administrator: The Administrator is the state official who administers and enforces the state's securities law, each state has its own, and NASAA only coordinates. Alone the office makes published rules, investigates inside or outside the state, and subpoenas witnesses and records. A court is required to enforce a subpoena, to grant any monetary remedy, and to impose any criminal penalty.
• Other Penalties and Liabilities: A securities violation opens four doors. Administrative: the Administrator issues cease and desist with no prior hearing. Judicial: only a court grants injunctions, receivers, rescission, restitution, and disgorgement, and the Administrator posts no bond. Criminal: willful violations carry a $5,000 fine and up to 3 years imprisonment, with a no-knowledge-of-the-rule defense that blocks prison but not fines. Civil: the buyer sues for price paid plus interest and fees, less income received, with the burden flipped onto the seller on fraud but strict liability on a registration violation, within 2 years of discovery or 3 years of the sale, whichever comes first. SIPC is federal, not a USA remedy, restoring up to $500,000 per customer per capacity with a $250,000 cash sublimit inside it.

Communication with Customers and Prospects (20%)

• Correspondence and Advertising: FINRA classifies communications as retail, correspondence, or institutional by audience size, holds all three to the same fair-and-balanced content standard, and requires prior principal approval only for retail communications. The Administrator may separately require filing of any sales literature before, during, or after use, though exempt securities, exempt transactions, and federal covered securities fall outside that authority. Registration is procedural and never approval, so "effective," "registered," and "filed" are the accurate words while "approved," "endorsed," or "recommended" is unlawful, even for a fully registered security. Guaranteeing a customer against loss is absolutely prohibited for broker-dealers and agents alike, and profit-sharing needs written consent from both the customer and the firm. Every electronic channel must be supervised and retained, and records run mostly 3 or 6 years.
• Customer Agreements: A principal approves every new account, but the customer signs nothing to open a cash account, while the firm still furnishes the account record within 30 days and every 36 months after. A margin account needs the margin agreement signed promptly after the first margin transaction, Reg T's 50% initial margin, FINRA's 25%/30% maintenance margin, and a $2,000 equity floor. An options account needs the Options Disclosure Document delivered at or before approval, an options-qualified principal to approve, and the signed agreement and verification both returned within 15 days. The firm makes a reasonable effort to name a trusted contact person aged 18 or older. Two lines never move: registration is effective, never approved, and no agent may guarantee against loss or cushion a customer's losses.
• Performance Guarantees Prohibition: No securities professional may guarantee a customer against loss or promise a specific return, in any account or transaction, and no client consent creates an exception. The exam disguises it as a promise to repurchase at cost, or an offer to cover a decline personally. Quoting a bond's stated coupon is not a guarantee, because it states the issuer's obligation rather than the professional's promise.
• Required Product Disclosures: Securities sold at a bank need all four disclosures, both orally and in writing, at or before account opening. Prospectus delivery runs 25, 90, or 40 days by listing and offering type, statements are quarterly except monthly for penny stocks, and confirmations disclose capacity, price, and settlement. Brochure timing splits by registrant, with state-registered advisers still owing 48 hours' notice or a 5-day cancellation right, and a state may never demand records beyond the federal standard.
• Unlawful Representations Concerning Broker-Dealer Agent Registration: A registration becomes effective and is never approved, because the Administrator does not pass on the merits of, recommend, or endorse any person, security, or transaction. The rule covers exempt securities and exempt transactions just as fully, since an exemption speaks to registration alone and never to quality. Any representation of approval is an unlawful representation by itself, even when everything else the agent said was accurate.

Ethical Practices and Obligations (25%)

• Compensation: A broker-dealer acts as agent (commission, disclosed separately) or principal (markup or markdown, embedded in price), never both on one trade, and every charge must be fair and reasonably related to current market value. The 5% policy is a guideline judged by seven factors, so an excessive charge is a violation even under 5% and even if disclosed. NASAA dishonest practices sweep in unfair pricing, unreasonable service fees, firm-induced excessive trading, and splitting commissions with unregistered persons. On mutual funds, disclose all sales charges and available breakpoints, and never switch similar funds without a suitability basis. Reg BI binds broker-dealers to a four-part best-interest standard, soft dollars cover only qualifying research and brokerage, and an adviser's contract cannot pay on capital gains outside the qualified-client route.
• Conflicts of Interest, Criminal Activities, and Other Ethics Issues: The NASAA dishonest and unethical practices catalog bans churning, unauthorized trading, guaranteeing against loss, market manipulation, and unpaid arbitration awards. Agents live under bright lines: never borrow from or lend to a customer, never sell away without written pre-approval before execution, and share in an account only with written consent from both the customer and the broker-dealer, which is the whole state-law test. Add the mutual-fund rules on breakpoints, the no-load label, and switching, plus the conflict framework of written adviser disclosure before advice and broker-dealer disclosure under Regulation Best Interest, and this unit answers itself.
• Customer Funds and Securities: Client assets must stay separate from the firm's: commingling and conversion are always prohibited, and an adviser with custody needs a qualified custodian and generally a surprise exam. Discretion means the professional picks the security, the amount, or the action. A broker-dealer or agent needs written authorization before the first discretionary trade, while an investment adviser may act on oral discretion but must obtain written authorization within 10 business days of that trade. Time-and-price direction is not discretion. Full trading authorization adds withdrawal rights; limited does not. Broker-dealers owe best interest or suitability at recommendation, advisers owe an ongoing fiduciary duty, and trustees owe the prudent investor standard.