Series 66 Combined Rule Review Sheet
- April 1, 2025
- Posted by: 'FINRA Exam Mastery'
- Category: Finance
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🧾 Series 66 Combined Rule Review Sheet
📘 Essential Rules from the Series 63 + 65 Exams in One Place for the Series 66
The Series 66 exam blends regulatory content from both the Series 63 (state securities law) and the Series 65 (investment adviser law) into one exam. To help you review efficiently, here’s a clean, one-page combined rule sheet that highlights key rules, thresholds, exemptions, and penalties — exactly what you need to recall under pressure.
📍 I. Registration Thresholds
| Entity | Register With | Threshold |
|---|---|---|
| Investment Adviser (IA) | SEC (Federal) | ≥ $110M AUM or federal exemption |
| Investment Adviser (IA) | State | < $100M AUM |
| Federal Covered Adviser | SEC only | Not required to register with state |
| IAR of State IA | State | Where IAR has place of business |
| IAR of Federal IA | State | Where IAR has place of business |
📍 II. Registration Triggers & Exemptions
| Scenario | Rule |
|---|---|
| 6+ clients in a state in 12 months | Must register in that state |
| ≤ 5 clients (non-institutional) in a state | De minimis exemption applies |
| Advising only banks, IAs, or BDs | May be exempt from IA registration |
| Publishers with general, non-tailored advice | Exempt from IA definition |
| Solicitor gets paid but isn’t registered | Must be registered or disclosure made |
📍 III. Definitions You MUST Know
- Agent: Natural person who represents a broker-dealer in buying or selling securities.
- Broker-Dealer (BD): Entity in business of buying/selling securities for clients or own account.
- Investment Adviser (IA): Gives advice on securities for compensation.
- IAR: Associated with an IA and engages in advisory activities (not just clerical).
📍 IV. Exempt Securities vs. Exempt Transactions
| Exempt Securities | Exempt Transactions |
|---|---|
| U.S. Government & Agencies | Unsolicited brokerage transactions |
| Municipal Bonds (in-state) | Private placements (limited offering) |
| Banks and credit unions | Isolated non-issuer transactions |
| Commercial paper (≤ 270 days) | Transactions with institutional buyers |
| Insurance company securities | Fiduciary transactions (trustees, etc.) |
📍 V. Required Disclosures & Documents
- Form ADV Part 1: Filed with SEC/state, general business info
- Form ADV Part 2A: Disclosure brochure to clients
- Form ADV Part 2B: Brochure supplements for supervised persons
- Form U4: Registers individuals with FINRA/state
- Form U5: Termination form; must be filed within 30 days
📍 VI. Custody Rules (NASAA)
| Action | Rule |
|---|---|
| Adviser has physical custody | Must notify administrator, comply with custody rules |
| Deducts fees directly from account | Not considered custody IF disclosed and authorized |
| Custody = access to funds/securities | Must maintain $35,000 net worth if custody held |
📍 VII. Ethical Prohibitions
🚫 You CANNOT:
- Borrow from or lend to a client (unless they’re a BD or family)
- Guarantee returns or against losses
- Omit material facts
- Engage in excessive trading (churning)
- Misrepresent qualifications or credentials
📍 VIII. Penalties and Enforcement
| Violation Type | Penalty |
|---|---|
| Criminal | Up to $5,000 fine and/or 3 years prison |
| Civil | Rescission + interest + costs |
| Statute of Limitations | 3 years from violation or 2 years from discovery |
| Rescission offer | Client has 30 days to respond or lose right to sue |
📍 IX. Fiduciary vs. Suitability Standards
| Standard | Applies to | Focus |
|---|---|---|
| Fiduciary | Investment Advisers | Client’s best interest |
| Suitability | Broker-Dealers | Client’s investment profile |
📍 X. Advertising & Testimonials
- Advisers may use testimonials (under new SEC rule, if properly disclosed)
- Must disclose risks, performance basis, and any conflicts
- Testimonials must not be misleading
- Past performance is not indicative of future results disclaimer required
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