Practice Quiz

FINRA Series 63 (NASAA)

Category - Series 63

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Ms. Connie Fused sent her investment adviser a check, payable to a mutual fund that he had recommended to her. What must the adviser do in order to avoid being considered the custodian of this account and, thereby, subject to some strict requirements, including a higher minimum net capital?
  1. He needs to forward the check to the mutual fund within 3 days.
  2. He needs to forward the check to the mutual fund within 24 hours.
  3. He needs to get a written statement from Ms. Fused, addressed to the state Administrator,indicating it was her mistake.
  4. He needs both to forward the check within 24 hours and to obtain a written statement from Ms. Fused.
Explanation
Answer: B - As long as the adviser forwards the check to the mutual fund within 24 hours, he will not be deemed to have taken custody of Ms. Fused funds. This assumes the mutual fund is in no way affiliated with the investment adviser.
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