Series 34 Retail Off-Exchange Forex Exam​

Correct: Under the Uniform Securities Act, broker-dealers are required to establish and maintain a system to supervise the activities of their agents that is reasonably designed to achieve compliance with applicable securities laws. A failure to supervise occurs when the firm lacks a system that would reasonably be expected to detect and prevent violations. Simply having a manual is insufficient; the firm must actively implement and document its supervisory procedures, including reviewing trade logs and correspondence, to ensure compliance with suitability rules and hold supervisors accountable for their oversight duties. Incorrect: Relying solely on annual attestations is a passive measure that does not constitute active supervision or the detection of specific violations. While third-party consultants can assist in the compliance process, the ultimate regulatory responsibility for supervision remains with the broker-dealer and cannot be fully offloaded to avoid liability. Increasing net capital addresses the firm’s financial stability and ability to meet obligations, but it does not rectify the underlying failure to monitor agent conduct or prevent the sale of unsuitable products to clients. Takeaway: Effective supervision requires the active and documented implementation of oversight procedures to detect and prevent agent misconduct, rather than just maintaining written policies.

Correct: Under the Uniform Securities Act, any individual representing a broker-dealer in effecting or attempting to effect purchases or sales of securities is defined as an agent and must be registered. This requirement is not waived for unsolicited orders, nor is it dependent on the receipt of commissions. Performing the functions of an agent, such as accepting client orders, without proper registration is a violation of state law.

Correct: Under the Uniform Securities Act, the definition of an Investment Adviser Representative (IAR) includes any individual associated with an investment adviser who performs several specific functions, one of which is soliciting, offering, or negotiating for the sale of investment advisory services. Even though the Business Development Associate is not managing portfolios or giving specific security recommendations, the act of soliciting prospects and negotiating advisory contracts falls squarely within the regulatory definition of an IAR. Incorrect: The argument that the individual is not an IAR because they do not provide specific advice is incorrect because the Act specifically includes solicitation as a triggering activity. The suggestion that supervision provides an exclusion is incorrect; supervised persons performing IAR functions must still be registered. The claim that the definition depends on the compensation structure (performance-based bonuses) is a common misconception; the definition is based on the nature of the activities performed, not the specific method of remuneration. Takeaway: An individual is defined as an Investment Adviser Representative if they solicit, offer, or negotiate for the sale of investment advisory services, regardless of whether they provide direct investment advice.

Correct: Under the Uniform Securities Act, any material change to the information contained in a broker-dealer’s registration application (Form BD) must be updated promptly. Changes in the firm’s name and executive officers are considered material information that requires an amendment to the existing registration to ensure the public record is accurate and transparent for regulators and investors. Incorrect: Delaying the update until the annual renewal on December 31 is a violation of the requirement to report material changes as they occur. Providing notification via a formal letter within 90 days is insufficient, as the Act specifically requires the filing of an amendment to the official registration form (Form BD). While a successor firm may sometimes need to file a new application, a name change and officer update for an existing entity are handled through amendments rather than a completely new initial registration with full fees. Takeaway: Broker-dealers are required to promptly amend their registration filings whenever material information, such as a change in name or control persons, becomes inaccurate.

Correct: Under the Uniform Securities Act, an investment adviser is exempt from registration in a state if it has no place of business in that state and its only clients are institutional investors, such as banks, insurance companies, or registered investment companies. This exemption applies regardless of the number of institutional clients, provided no retail clients are served in that jurisdiction.

Correct: Under the Uniform Securities Act, a broker-dealer is excluded from the definition of a broker-dealer in a state if it has no place of business there and its only clients are institutional investors, such as insurance companies or pension funds. However, as soon as the firm accepts a single retail resident of that state as a client, the exclusion is lost. Therefore, the firm must register in State B before conducting business with the retail resident to mitigate the risk of unregistered activity and potential rescission offers. Incorrect: The idea that majority revenue or lack of a physical office allows for retail activity without registration is a common misconception; the exclusion is strictly limited by the type of client. Regulatory requirements and investor protections cannot be waived through private contracts or disclosure agreements. Furthermore, while a de minimis exclusion exists for Investment Advisers in many jurisdictions, it does not apply to Broker-Dealers under the Uniform Securities Act when dealing with residents of a state. Takeaway: A broker-dealer with no place of business in a state loses its registration exclusion the moment it services a single non-institutional resident of that state.

Correct: Under the Uniform Securities Act, broker-dealers and their agents are excluded from the definition of an investment adviser (and thus the agents from IAR registration) only if the advisory services provided are ‘solely incidental’ to the conduct of their business as a broker-dealer and no ‘special compensation’ is received. Charging a separate flat fee for a financial plan constitutes special compensation, which triggers the requirement for the individuals to register as investment adviser representatives. Incorrect: The number of retail clients may impact whether a firm can claim a de minimis exemption, but it does not change the underlying definition of an IAR based on the nature of compensation. The classification of securities as federal covered or state-registered does not exempt an individual from registration if they meet the definition of an IAR. Using proprietary research is a common practice for both agents and IARs and is not a regulatory trigger for registration status. Takeaway: Receiving special compensation for investment advice removes the ‘solely incidental’ exclusion for broker-dealer agents, necessitating their registration as investment adviser representatives.

Correct: Under the Uniform Securities Act, the Administrator has the authority to issue a summary order to postpone or suspend a registration. To comply with due process, the Administrator must promptly notify the interested parties (the applicant and the employer), provide the reasons for the action, and inform them that a hearing will be granted within 15 days of a written request. Incorrect: The Administrator does not require a court injunction to issue an administrative summary order, as this is part of their direct regulatory authority. A 30-day notice period is incorrect because summary orders are designed to be immediate; the hearing occurs after the order is issued. Criminal complaints are separate legal actions and are not a prerequisite for administrative actions regarding the status of a registration application. Takeaway: The Administrator can summarily suspend or postpone a registration but must provide notice and the opportunity for a hearing within 15 days of a written request.

Correct: According to the Uniform Securities Act, when an agent begins or terminates a connection with a broker-dealer, or begins or terminates those activities which make him an agent, the agent as well as the broker-dealer must promptly notify the Administrator. This joint responsibility ensures that the regulatory body can maintain accurate records of where individuals are authorized to conduct securities business. Incorrect: The claim that only the agent is responsible is incorrect because the Act explicitly mandates that both the agent and the broker-dealer provide notification. The suggestion of a de minimis threshold of five retail clients is a common confusion with the rules governing Investment Advisers; broker-dealer agents generally do not have a de minimis exemption for solicitation in a state. The idea of a 60-day window or a federal reciprocity provision allowing an agent to practice without state-specific registration is inaccurate, as registration requirements are immediate and state-specific. Takeaway: Under the Uniform Securities Act, both the broker-dealer and the agent share the legal obligation to promptly notify the State Administrator of any changes in the agent’s employment or jurisdictional status.

Correct: The application of daily rollovers, also known as swaps, is a fundamental component of retail forex portfolio management. When a position is held past the daily close (typically 5:00 PM ET), the account is credited or debited based on the interest rate differential between the base currency and the quote currency. In a portfolio that is market-neutral or synthetically hedged across correlated pairs, a trader may still face a net negative cost of carry if the interest paid on the short positions exceeds the interest earned on the long positions. This erosion of equity occurs independently of spot price movements and is a standard industry practice governed by interest rate parity principles and individual dealer policies. Incorrect: The assertion that NFA Rule 2-43 prohibits netting across different currency pairs is a misunderstanding of the regulation; Rule 2-43(b) specifically prohibits offsetting long and short positions in the same currency pair within the same account, but does not prevent holding correlated pairs. The idea that dealers must automatically rebalance portfolios when margin falls below a certain threshold is incorrect, as firms typically have the right to liquidate positions to cover margin deficiencies rather than rebalance for strategy purposes. The concept of leverage decay is generally associated with daily-resetting exchange-traded products and does not accurately describe the interest-based cost of carry inherent in spot forex rollovers. Takeaway: Portfolio balance in retail forex is affected not only by spot price fluctuations but also by the cumulative impact of daily rollovers and interest rate differentials.

Correct: Under the Uniform Securities Act, the definition of a broker-dealer excludes firms that have no place of business in a state and limit their activities to institutional investors or existing customers who are not residents of the state but are temporarily visiting (often called the snowbird exemption). Since Global Assets LLC has no office in the state and is only dealing with pension funds and vacationing clients, it does not meet the statutory definition of a broker-dealer in that specific state. Incorrect: The claim that registration is required regardless of residency status is incorrect because the Act specifically provides an exemption for existing clients who are temporarily in a state. The suggestion that retail clients always trigger registration is incorrect because the snowbird exemption applies to retail clients who are not residents. The de minimis exemption (fewer than six clients) applies to Investment Advisers under the Act, not to Broker-Dealers; for a Broker-Dealer, even one retail resident client would typically trigger registration if the firm has no other exemption. Takeaway: An out-of-state firm is not defined as a broker-dealer if it has no office in the state and limits its business to institutional clients or existing customers temporarily visiting the state.

Correct: Under the Uniform Securities Act, an agent of a broker-dealer must be registered in any state where they conduct business with a retail resident. While there is an exemption for broker-dealers (and by extension, their agents) who have no place of business in a state and deal only with institutional investors, this exemption is lost the moment the agent services a retail client residing in that state. Unlike Investment Advisers, broker-dealers and their agents do not benefit from a de minimis exemption for a small number of retail clients. Incorrect: The de minimis exemption, which allows for a small number of retail clients without registration, applies to Investment Advisers and their representatives, not to broker-dealers or their agents. The lack of a physical office only provides an exemption if the clientele is strictly limited to institutional investors or other broker-dealers. The existing client exemption (often called the snowbird rule) only applies to clients who are temporarily in a state, not those who have established permanent residency. Takeaway: Broker-dealer agents must be registered in a state to conduct business with any retail resident, regardless of the firm’s physical presence or the number of clients.

Correct: Under the Uniform Securities Act, the definition of an investment adviser follows the ‘ABC’ test: providing Advice about securities, as a Business, for Compensation. Although banks are excluded from the definition of an investment adviser, this exclusion applies to the institution’s bona fide banking activities. When an individual employee engages in an outside business activity providing specific investment advice for separate compensation (the ‘portfolio review fee’), they satisfy the three prongs of the definition and are not covered by the institutional bank exclusion. Incorrect: The bank exclusion is intended for the entity’s professional services and does not provide a blanket shield for employees conducting private advisory businesses for separate pay. The status of a security as ‘exempt’ (such as municipal bonds) refers to the registration of the security itself, not to the person providing advice about it; advice on exempt securities still constitutes investment advice. De minimis thresholds typically apply to the number of clients an adviser has in a state before registration is required, but they do not change the underlying statutory definition of what constitutes an investment adviser. Takeaway: An individual meets the definition of an investment adviser if they provide securities advice for compensation, even if their primary employer is an excluded entity like a bank or a broker-dealer.

Correct: Under the Uniform Securities Act, the Administrator has broad investigative powers. This includes the authority to conduct public or private investigations within or outside of the state to determine if violations have occurred or are about to occur. The Administrator can subpoena witnesses and require the production of books, papers, and other records deemed relevant to the inquiry without needing a court order first. If a person refuses to obey a subpoena, the Administrator may then apply to a court to enforce it. Incorrect: The claim that a court order is required before issuing a subpoena is incorrect because the Administrator is granted the power to issue subpoenas directly as part of their administrative authority. The idea that investigative power is limited to the home state is incorrect because the Act specifically allows for investigations across state lines if the activity originated in or was directed to the Administrator’s state. The assertion that a cease and desist order must precede a subpoena is incorrect because investigations are often the preliminary step used to gather evidence before any formal administrative action or order is taken. Takeaway: The state securities Administrator possesses broad authority to conduct investigations and issue subpoenas both within and outside their home state without an initial court order.

Correct: Under the Uniform Securities Act, an agent is defined as any individual, other than a broker-dealer, who represents a broker-dealer or issuer in effecting or attempting to effect purchases or sales of securities. There is no exclusion for individuals who only take unsolicited orders or for those who do not receive commissions if they are representing a broker-dealer in a transactional capacity. Accepting an order, even if unsolicited, constitutes ‘effecting’ a transaction. Incorrect: The argument that exchange-listed securities exempt the individual is incorrect because while the security itself may be exempt from registration, the person representing the broker-dealer in the transaction is not. The lack of transaction-based compensation or the temporary nature of the work does not provide an exemption for someone performing the functions of an agent for a broker-dealer. Finally, the definition of an agent includes both soliciting and effecting transactions; it is not limited solely to solicitation or the provision of advice. Takeaway: Any individual representing a broker-dealer in effecting securities transactions is defined as an agent and must be registered, regardless of the security’s registration status or the unsolicited nature of the trade.

Correct: Under the Uniform Securities Act, a person who has no place of business in a state is not required to register as an investment adviser if their only clients in that state are institutional investors, such as banks, insurance companies, or investment companies. Since the firm’s only clients in the state are banks and insurance companies and it lacks a physical presence, it is exempt from state registration requirements. Incorrect: The suggestion that the firm must register due to a de minimis threshold is incorrect because institutional clients are not counted toward the de minimis limit; the de minimis exemption applies to five or fewer non-institutional (retail) clients. The claim that the exclusion only applies to Treasury securities is a fabrication, as the institutional exemption applies regardless of the security type. Finally, the assertion that digital communication triggers mandatory registration in all states is incorrect, as the Act specifically provides exemptions based on the nature of the client and the lack of a physical place of business. Takeaway: Investment advisers with no physical place of business in a state are exempt from registration if their only clients in that state are institutional investors.

Correct: Under the Uniform Securities Act and NASAA model rules, broker-dealers and investment advisers are required to maintain and preserve all records, including electronic communications, related to their business. This includes text messages or third-party app messages if they concern investment advice or securities transactions. If a firm cannot archive these communications, it cannot fulfill its obligation to produce them during a regulatory audit or investigation, regardless of the encryption or privacy benefits intended by the agent. Incorrect: Providing a monthly affidavit is insufficient because regulators require the actual, original records of communication to verify compliance and suitability. There is no distinction in recordkeeping requirements between new prospects and existing clients regarding the archiving of business communications. Furthermore, state securities laws do not provide a ‘safe harbor’ that allows firms to bypass recordkeeping mandates in favor of client privacy; rather, firms must find secure ways to archive those private communications. Takeaway: All business-related electronic communications between agents and clients must be archived and retrievable to comply with state recordkeeping and oversight regulations.

Correct: Under the Uniform Securities Act, the definition of a security includes variable insurance products because the investment risk is borne by the policyholder rather than the insurance company. Conversely, fixed annuities (including fixed-indexed annuities where the insurer guarantees a minimum return) are generally excluded from the definition of a security. An issuer is defined as any person who issues or proposes to issue any security; therefore, the insurance company acts as an issuer when offering variable products. Incorrect: The assertion that both products are securities is incorrect because fixed-indexed annuities are typically classified as insurance products, not securities, as the insurer assumes the primary investment risk. The claim that the insurance company is excluded from the definition of an issuer is false; while the company is regulated, it still meets the definition of an issuer when it creates securities. Reversing the status of variable and fixed products is incorrect because variable products are specifically identified as securities due to the separate account’s market exposure. Takeaway: Variable insurance products are classified as securities under the Uniform Securities Act, whereas fixed annuities are excluded from the definition of a security.

Correct: According to the Uniform Securities Act, if the information contained in any document filed with the Administrator becomes inaccurate or incomplete in any material respect, the registrant must promptly file a correcting amendment. A change in the principal place of business (headquarters) and changes in the executive leadership team are considered material changes that require an update to the Form BD. Incorrect: Waiting until the annual renewal on December 31 is incorrect because material changes must be reported promptly, not just at year-end. Net capital requirements are a separate post-registration obligation and do not dictate whether a change in address or leadership must be reported. Filing a completely new application is unnecessary; the law provides for amendments to existing registrations to handle material changes without requiring a full re-registration process. Takeaway: The Uniform Securities Act requires registrants to promptly file an amendment whenever information in their registration application becomes materially inaccurate or incomplete.

Correct: Under the Uniform Securities Act, an Investment Adviser (IA) is defined by the ‘ABC’ test: providing Advice about securities, as a Business, for Compensation. Strategic Wealth Partners meets all three criteria. While the ‘LATE’ exclusion (Lawyers, Accountants, Teachers, Engineers) exists, it only applies if the advice is ‘solely incidental’ to the practice of their profession. In this scenario, the firm is specifically providing customized securities reports for a retainer fee, which constitutes a separate investment advisory business rather than incidental accounting work. Incorrect: The claim that registration is triggered by discretionary authority or trade execution is incorrect; those activities relate more to broker-dealer functions or specific IA sub-regulations, but the core definition of an IA is based on advice for compensation. The publisher’s exclusion is also inapplicable because it is reserved for publications of general and regular circulation that do not provide advice based on the specific situations of each client. Finally, there is no specific ‘percentage of revenue’ rule in the Uniform Securities Act that grants an automatic exemption based on a CPA’s professional status if the firm is actively engaged in the investment advisory business. Takeaway: An entity must register as an investment adviser if it meets the three-pronged test of providing advice, as a business, for compensation, regardless of whether it has custody of funds or if its employees hold other professional licenses.

Correct: Under the Uniform Securities Act, a supervisor or broker-dealer can be sanctioned for failing to reasonably supervise an agent. The fact that an agent has a long tenure or a clean record does not permit a supervisor to ignore automated alerts or red flags. Reasonable supervision requires following established procedures and investigating suspicious activity, regardless of the agent’s seniority or past performance. Incorrect: One alternative incorrectly suggests that the Act allows for discretionary exemptions from supervision based on tenure, which would undermine the protective intent of the law. Another option wrongly claims that a supervisor must have direct knowledge or participation in the fraud to be liable; however, ‘failure to supervise’ is a distinct violation based on negligence or omission. The final incorrect option suggests that the supervisor is exempt if the firm’s procedures were vague, but the Administrator can still hold individuals accountable for failing to discharge their general supervisory duties reasonably. Takeaway: Supervisors must consistently apply oversight and investigate all red flags, as an agent’s experience or clean history never justifies a failure to perform required supervisory duties.

Correct: Under the Uniform Securities Act, the definition of an ‘agent’ excludes individuals who represent a broker-dealer in effecting transactions in a state with an existing client who is not a resident of the state but is temporarily present there. Since the client is in State Y for a temporary four-month assignment and was already a client of the agent, the agent does not meet the definition of an agent in State Y and is not required to register there. Incorrect: The de minimis exemption of five or fewer clients applies to Investment Advisers and Investment Adviser Representatives, not to Broker-Dealers or their agents. There is no 30-day rule in the Uniform Securities Act that automatically triggers registration for temporary presence. While unsolicited trades are considered exempt transactions, the primary reason for the registration exclusion in this scenario is the temporary nature of the client’s stay and the pre-existing relationship, regardless of whether the trades were solicited or unsolicited. Takeaway: Broker-dealer agents are excluded from registration in a state when servicing existing clients who are only temporarily present in that state.

Correct: Under the Uniform Securities Act, the limited offering (private placement) exemption is available if the offer is directed to no more than 10 non-institutional (retail) investors in the state during any 12-month period. However, a primary condition for this exemption is that no commission or other remuneration may be paid, directly or indirectly, for soliciting any non-institutional buyer in the state. Therefore, to maintain the exemption, the firm must not pay commissions for the retail portion of the offering. Incorrect: Registering agents as ‘exempt solicitors’ is not a recognized procedure under the Uniform Securities Act to bypass the commission prohibition for limited offerings. An isolated non-issuer transaction exemption applies to secondary market trades between parties, not to a primary offering by an issuer. The numerical limit for the limited offering exemption applies specifically to non-institutional offerees; institutional investors are generally excluded from this count, but their presence does not permit the payment of commissions for retail solicitations. Takeaway: To qualify for the state limited offering exemption, an issuer must ensure that no commissions are paid for soliciting non-institutional investors.

Correct: Under the Uniform Securities Act, an agent is defined as any individual who represents a broker-dealer in effecting or attempting to effect purchases or sales of securities. When an individual receives transaction-related or incentive-based compensation (such as a referral fee for a funded account) and assists with substantive parts of the account opening process (like determining risk profiles), they are acting as an agent and must be registered. The fact that they are a credit union employee does not provide an exclusion when they are performing these functions for a broker-dealer. Incorrect: The employee is not performing purely ministerial duties because they are assisting with risk profile selection and receiving sales-related incentives, making the clerical exclusion in the second option inapplicable. The third option is incorrect because ‘effecting transactions’ includes the solicitation and account opening process, not just the execution of trades. The fourth option is incorrect because the Uniform Securities Act does not distinguish between flat-fee incentives and percentage-based commissions; any compensation tied to the success of a securities-related event typically triggers registration. Takeaway: Any individual representing a broker-dealer who receives incentive-based compensation for securities-related activities must be registered as an agent under the Uniform Securities Act.

Correct: Under the Uniform Securities Act, the antifraud provisions are broad and universal. They apply to any person who directly or indirectly engages in fraud or deceit in connection with the offer, sale, or purchase of any security. This authority remains in effect even if the security itself is exempt from registration or if the transaction is exempt. The Administrator has the power to investigate, issue subpoenas, and seek legal remedies whenever fraudulent activity is suspected within their jurisdiction. Incorrect: The claim that the SEC has exclusive jurisdiction is incorrect because states retain concurrent antifraud authority even for federal covered or exempt securities. The suggestion that a warrant is required for an investigation is false, as the Administrator has broad summary powers to conduct investigations and issue subpoenas. Finally, the Administrator’s authority is not limited to licensing actions; they can pursue various legal and administrative remedies for fraud regardless of the registration status of the security. Takeaway: State antifraud authority under the Uniform Securities Act applies to all securities and transactions, including those that are exempt from registration requirements.

Correct: Under the Uniform Securities Act and standard post-registration requirements, if any information in the registration documents becomes inaccurate or incomplete in any material respect, the registrant must promptly file a correcting amendment. For an agent’s Form U4, material changes such as involvement in investment-related litigation or disciplinary actions must be reported via an amendment within 30 days of the event. Incorrect: Waiting for a final judgment or a specific settlement threshold is incorrect because the initiation of the legal action itself is a reportable event on Form U4. Deferring the update until the annual renewal is a violation of the requirement for prompt disclosure of material changes. Filing a Form U5 is used for the termination of registration, not for updating information regarding an active agent’s legal status. Takeaway: Material changes to an agent’s Form U4, including new legal proceedings, must be reported through an amendment within 30 days to maintain valid registration.

Correct: Under the Uniform Securities Act, securities issued by any state, territory, or possession of the United States, or any political subdivision thereof (such as a municipality), are classified as exempt securities. This exemption is based on the nature of the issuer itself. Because the security is exempt, it does not need to be registered with the state Administrator, regardless of whether it is sold to retail or institutional investors. Incorrect: The suggestion that the exemption only applies to institutional transactions is incorrect because municipal bonds are exempt securities, meaning the exemption applies to the security itself, not just the transaction type. Registration by coordination is a method used for securities that are also being registered with the SEC, but municipal bonds are exempt from SEC registration as well. While some federal covered securities require notice filings (like mutual funds or Rule 506 offerings), municipal bonds are generally exempt from such requirements under the Uniform Securities Act. Takeaway: Municipal bonds are categorized as exempt securities under the Uniform Securities Act, relieving the issuer from state registration requirements regardless of the target audience.

Correct: Under the Uniform Securities Act, the definition of an Investment Adviser Representative (IAR) includes any partner, officer, director, or other individual employed by or associated with an investment adviser who solicits, offers, or negotiates for the sale of investment advisory services. By describing the firm’s asset allocation models and fee schedules to prospects to determine fit, the assistant is engaged in solicitation, which requires registration regardless of the compensation structure. Incorrect: Exemptions for clerical or ministerial personnel only apply to those who do not engage in the solicitation of clients or the provision of advice; describing proprietary models to prospects exceeds clerical duties. The absence of transaction-based compensation does not remove an individual from the definition of an IAR if they are soliciting on behalf of an investment adviser. The location of the clients or the firm’s office relates to the firm’s registration requirements, but the individual’s activity itself triggers the need for IAR registration. Takeaway: Any individual who solicits investment advisory services on behalf of an investment adviser is defined as an investment adviser representative and must be registered accordingly.

Correct: The Uniform Securities Act defines an Investment Adviser Representative (IAR) to include individuals who supervise employees that perform advisory functions, such as making recommendations or managing accounts. Even if Sarah does not interact with clients directly, her role in supervising analysts and reviewing the suitability of their recommendations falls squarely within the regulatory definition of an IAR. Incorrect: The exclusion for clerical or ministerial personnel does not apply to those in supervisory roles over advisory activities. There is no ‘percentage of time’ threshold in the Uniform Securities Act that exempts a supervisor from registration based on the volume of their supervisory work. Direct client contact is not a prerequisite for IAR status if the individual is performing supervisory or management functions related to the advisory process. Takeaway: Supervision of employees who provide investment advice or manage portfolios is a core activity that requires registration as an Investment Adviser Representative under the Uniform Securities Act.