Series 63 practice questioneasyFederal Covered Adviser Definition
Which of the following is classified as a federal covered adviser under the USA?
- AAn adviser registered exclusively with the SEC✓ Correct answer
- BAn adviser that only gives advice about municipal securities
- CAn adviser with $80 million in AUM
- DAn adviser with only state registration
Explanation
Why A — An adviser registered exclusively with the SEC
A federal covered adviser is one registered exclusively with the SEC (USA Section 102(6)). Advisers solely advising municipal securities are generally excluded from the definition of investment adviser under the USA and thus not federal covered advisers. Advisers with $80 million AUM are below the $110 million threshold for mandatory SEC registration.
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