SIE Exam Question 563: Answer and Explanation

Question: 563

Investment advisers that have custody of client assets or require prepayment of advisory fees __________ or more in advance, and in excess of __________ for each client, must file an audited balance sheet with the SEC as of the end of the investment adviser's fiscal year.

• A. 6 months, $1,200
• B. 6 months, $1,500
• C. 12 months, $1200
• D. 12 months, $1,500

Correct Answer: A

Explanation:

Investment advisers that have custody of client assets or require prepayment of advisory fees 6 months or more in advance, and in excess of $1,200 for each client, must file an audited balance sheet with the SEC as of the end of the investment adviser's fiscal year.