Practice Quiz

FINRA Series 6

Category - Series 6

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Under the Investment Company Act of 1940, an investment company must:
  1. provide a prospective investor with a copy of its registration statement when offering shares for sale.
  2. maintain a minimum net worth of $5 million.
  3. have a board of directors composed of no more than 50% who are “interested persons.”
  4. include a statement of its investment policy in its prospectus.
Explanation
Answer: D - Under the Investment Company Act of 1940, an investment company must include a statement of its investment policy in its prospectus. It must provide prospective investors with a current prospectus, not its registration statement, when offering shares for sale. It must maintain a minimum net worth of only $100,000, and its board of directors can consist of up to 60% of interested persons.
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