Loans to and from Customers
Chapters in this video
- 0:00 The absolute prohibition on agents: money, securities, and custody
- 1:06 Why Barry the Bank still means no for an agent
- 2:11 Investment adviser borrowing exceptions: BD, affiliate, or financial institution
- 2:57 Investment adviser lending exceptions: IA as financial institution or affiliate client
- 3:12 Side-by-side comparison and the exam's favorite trap
- 3:54 Family relationships create zero exceptions for anyone
- 4:21 Rapid-fire exam recap
What this video covers
- Why an agent may never borrow from, lend to, or act as custodian for any customer, with absolutely zero exceptions
- The three narrow circumstances where an investment adviser (IA) may borrow from a client: broker-dealer, affiliate, or financial institution in the business of lending
- The two narrow circumstances where an IA may lend to a client: the IA itself is a financial institution, or the client is an affiliate
- Why a financial institution client still blocks an agent from borrowing, even though that same client creates a valid exception for an IA
- Why family relationships alone create no exceptions for either agents or investment advisers
- How to spot the side-by-side comparison trap the exam loves to set, and why the agent column is always a wall of "never"
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