Securities and Exchange Commission (SEC)

B is correct. Investment advisers with less than $100 million AUM must register with state securities regulators. Once Jennifer's AUM reaches or exceeds $100 million, she must file Form ADV with the SEC within 90 days and transition to SEC registration as a federal-covered adviser.

A is incorrect because anticipated future growth does not trigger immediate SEC registration; only actual AUM determines registration requirements. C misapplies the buffer zone rule, which allows advisers already registered with the SEC to remain SEC-registered until AUM drops below $90M (not $110M), but does NOT apply to state-registered advisers growing toward $100M. D is incorrect because registration jurisdiction is mandatory based on AUM thresholds, not optional.

C is correct. Investment advisers with $100 million or more in assets under management must register with the SEC under the Investment Advisers Act of 1940 and are classified as federal-covered advisers. These advisers file Form ADV with the SEC and are exempt from state registration requirements.

A ($25M) is sometimes referenced as a minimum threshold in certain state regulations but is not the SEC registration trigger. B ($50M) is not a regulatory threshold for SEC registration. D ($150M) exceeds the actual $100M requirement and is not a regulatory boundary.

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 accounts where the adviser has continuous investment management authority 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 EXCEPT answer). The Uniform Securities Act is NOT a federal law enforced by the SEC. It is a model law created by NASAA (North American Securities Administrators Association) 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 with $100M+ AUM and defines their fiduciary obligations.

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 must pay state notice filing fees (though these are typically much lower than registration fees).