The settlement date is the date that the buyer must pay for the securities purchased. For stocks and

bonds other than U.S. Treasury securities, this date is the third business day after the trade. For U.S.

Treasuries and options that sell on exchanges, the settlement date is the next business day.

As defined by the Uniform Securities Act, an exempt security is one that need not be registered in

the state in which it is sold. Selections A and D describe exempt transactions. Although securities

issued by financial institutions, such as banks, are exempt securities, not all securities that a bank

purchases and sells qualify as exempt securities. Private placements may also be exempt

transactions, but there are other stipulations that must be met.

As a director of the firm, Larry would automatically be registered as an investment adviser

representative of MoeMoney Investment Advisers. Although directors and officers of the firm are

automatically registered as investment adviser representatives, Mary, as a sales representative,

would have to apply for her own registration. Curly does not need to be registered since he performs

only clerical duties.

If a fund has either Selection I or Selection II, an agent cannot tell a client it is “no load.” If the fund

has either a front-end load, a contingent deferred sales load, or both, the client must be told that the

fund has a load. If the 12b-1 fees on a fund are 0.25% or less of the annual average net assets, it is

not considered to be a load fund.

To say a security is “exempt” means only that the security is exempt from state registration

requirements. It is not exempt from the state’s anti-fraud laws and may or may not be part of an

exempt transaction. That is defined by the transaction.

The bond’s registration is effective for one full year from the effective date of the registration.

Once an issuer has registered securities with the state, the documentation supplied in that

registration statement can be incorporated into the registration statement for future securities the

issuer wants to offer for sale by reference only for a period of five years.

Investment advisers may not use testimonials of satisfied clients to solicit new clients. They may

provide past stock picks, as long as they provide a complete list, that compilation period for the list is

at least a year, and as long as they are careful to note that past performance is no guarantee of future

performance. They can also offer freebies, such as a free initial consultation or a free financial

planning kit, as long as these are indeed offered “free,” with no obligation on the part of the client.

In advertising his services, Big Bo can list the names of the players he’s advising only if he has their

written permission to do so. Under both NASAA Model Rules and the Investment Adviser Act of

1940, an investment adviser representative may not use client testimonials in their advertisements,

regardless of whether the testimonials are willingly provided and uncompensated.

The Uniform Securities Act (USA) provides a model for states to follow when formulating their own

securities laws. It does not, itself, contain any laws.