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← Series 63: Regulation of Investment Advisers
Series 63 practice questionmediumIA Exemptions and Exclusions — Exclusion for Banks and Bank Holding Companies

First City Bank, a state-chartered bank, provides investment advice to its trust department clients as part of its regular banking business. Under the USA, what is First City Bank's registration requirement as an investment adviser?

  1. AIt is excluded from the definition of investment adviser under the USA.✓ Correct answer
  2. BIt must register if it advises more than five clients.
  3. CIt must register as an investment adviser in its home state.
  4. DIt must register only if it charges a separate fee for advice.
Explanation

Why A — It is excluded from the definition of investment adviser under the USA.

The USA excludes banks, bank holding companies, and trust companies from the definition of investment adviser when providing advisory services as part of their regular banking activities (USA Section 401(c)).

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