What is Securities and Exchange Commission (SEC)?

B is correct. At $95 million Jennifer registers with the state. Under SEC Rule 203A-1(a)(1), an adviser with at least $100 million but less than $110 million of assets under management may, but is not required to, register with the SEC; registration becomes mandatory at $110 million. A state-registered adviser applies for SEC registration within 90 days of filing an annual updating amendment to Form ADV that reports it is eligible (Rule 203A-1(b)(1)).

A is incorrect because expected growth does not change her status; actual assets under management determine eligibility. C is incorrect because reaching $100 million makes SEC registration optional, not mandatory, and the 90-day period runs from the annual updating amendment, not from the day assets reach a threshold. D is incorrect because at $95 million she is below the $100 million level at which SEC registration becomes optional.

C is correct. Investment advisers with $110 million or more in assets under management generally must register with the SEC under the Investment Advisers Act of 1940 and are federal-covered advisers; from $100 million to under $110 million, SEC registration is optional (SEC Rule 203A-1(a)(1)). These advisers file Form ADV with the SEC and are exempt from state registration requirements.

A ($25M) is the line below which an adviser regulated by its home state generally may not register with the SEC; it is not the mandatory trigger. B ($50M) is not a regulatory threshold for SEC registration. D ($150M) is not the SEC registration trigger; it is the assets-under-management limit (less than $150 million in the United States) for the private fund adviser exemption under Advisers Act Section 203(m).

B is correct. Calculate AUM: $92M (discretionary) + $6M (non-discretionary managed accounts) = $98M. Assets under management includes both discretionary and non-discretionary accounts where the adviser provides continuous and regular supervisory or management services. The $8M in financial planning-only client assets is not included because the adviser doesn't manage those assets.

A ($92M) incorrectly excludes the non-discretionary managed accounts. C and D ($106M) incorrectly include the $8M financial planning assets. For SEC registration purposes, only securities portfolios for which the adviser provides continuous and regular supervisory or management services count toward AUM, regardless of whether authority is discretionary or non-discretionary. Since the adviser has $98M AUM (under $100M), state registration applies, not SEC registration.

C is correct (the exception). The Uniform Securities Act is not a federal law enforced by the SEC. It is a model state law, drafted by the National Conference of Commissioners on Uniform State Laws and later amended by the North American Securities Administrators Association (NASAA), that serves as a template for state securities regulations. States adopt variations of the USA to regulate state-registered investment advisers, broker-dealers, and securities offerings within their jurisdictions.

A is accurate: The SEC enforces the Securities Act of 1933, which requires registration of new securities offerings and disclosure through prospectuses. B is accurate: The Securities Exchange Act of 1934 established the SEC and gave it authority over secondary market trading, broker-dealers, and securities exchanges. D is accurate: The Investment Advisers Act of 1940 is a federal law enforced by the SEC that regulates investment advisers, including SEC registration of larger advisers, and is the source of their federal fiduciary duty.

B is correct. Statements 1, 2, and 4 are accurate.

Statement 1 is true: SEC-registered advisers must file Form ADV electronically through the Investment Adviser Registration Depository (IARD) and pay annual filing fees to the SEC.

Statement 2 is true: The SEC has examination and enforcement authority over federal-covered advisers, including the power to conduct inspections, investigate violations, and impose penalties for securities law violations.

Statement 3 is false: While federal-covered advisers are exempt from state registration requirements, they are not exempt from all state regulations. States retain anti-fraud authority and can enforce anti-fraud provisions against SEC-registered advisers operating in their state.

Statement 4 is true: Federal-covered advisers must file notice filings (typically using Form ADV) with each state where they have a place of business or meet the state's client threshold, and may be required to pay state notice filing fees.