Series 66 Regulatory Framework Chart

🧾 Series 66 Regulatory Framework – Quick Reference Chart
📘 Understand the Core Legal Structure Behind the Series 66 Exam

To succeed on the Series 66 exam and operate effectively as an Investment Adviser Representative or Securities Agent, you need to understand the regulatory framework that governs the financial industry. Here’s a simplified reference chart highlighting the essential components of the legal and regulatory structure you’ll be tested on.

🎯 1. Federal Laws

These are nationwide laws enacted by Congress that form the foundation of securities regulation:

• Investment Advisers Act of 1940 – Regulates investment advisers and defines fiduciary duties.
• Securities Act of 1933 – Governs the registration of new securities.
• Securities Exchange Act of 1934 – Regulates secondary market activity and created the SEC.

🎯 2. State Laws

These laws are enforced by individual U.S. states:

• Uniform Securities Act (USA) – Model law adopted (with modifications) by many states to regulate securities offerings and professionals.
• Blue Sky Laws – State-level regulations requiring securities and firms to be registered in the state to protect investors from fraud.

🎯 3. Regulatory Bodies

These organizations enforce the securities laws and protect investors:

• SEC (Securities and Exchange Commission) – Federal oversight of securities markets and participants.
• NASAA (North American Securities Administrators Association) – Develops model rules for state securities regulators.
• FINRA (Financial Industry Regulatory Authority) – Regulates broker-dealers and their registered representatives.
• State Administrators – Oversee securities regulation within each individual state.

🎯 4. Fiduciary Standards

These rules define the ethical obligations of investment professionals:

• Duty of Loyalty – Always act in the client’s best interest.
• Duty of Care – Provide competent, informed advice based on thorough analysis.
• Full Disclosure – Disclose all material conflicts of interest.
• Best Interest Standard – Recommend products only if they truly suit the client’s needs.

🎯 5. Registration Requirements

These cover how individuals and firms become authorized to do business:

• Form ADV – Used by investment advisers to register with the SEC or state.
• Form U4 – Used to register individuals with FINRA/state.
• CRD/IARD Systems – Central databases for tracking registrations, exams, and disclosures.
• Firm and Individual Registration – Required for compliance with both federal and state regulations.

🎯 6. Anti-Fraud Rules

Laws that prohibit deceptive practices in the securities industry:

• Rule 10b-5 (under the 1934 Act) – Prohibits fraud, misrepresentation, or omission of material facts in the sale of securities.
• State and Federal Anti-Fraud Provisions – Apply regardless of whether a security is exempt or registered.

🚀 How This Helps for the Series 66 Exam

Knowing this structure helps you answer questions about:

• When federal vs. state law applies
• Who enforces what regulation
• How advisers are registered
• What disclosure and ethical duties are required
• What constitutes fraud or misconduct

This framework is central to both the Regulatory Environment and Ethical Standards sections of the exam. Memorize the components, understand how they interact, and be ready to apply them in scenario-based questions.

🎓 Ready to master Series 66?
Use this chart to organize your understanding of the regulatory environment—and build a solid foundation for both the exam and your financial services career.