SERIES 63 TOP QUESTIONS WITH
CORRECT ANSWERS
Which of the following persons are NOT excluded from the definition of, or exempt from
registration as, a broker-dealer under the Uniform Securities Act?
A broker-dealer with no office in the state that has no more than 5 retail clients resident in the
state within a 12 month period
Even without a place of business in a state, once a broker-dealer has even a single retail client
residing in that state, registration is required. Unlike investment advisers, there is no de minimis
exemption for broker-dealers. As long as a broker-dealer does not have an office in the state, it
is possible to qualify for exclusion from the definition. The primary requirement for the
exclusion is that the broker-dealer confines trading to financial institutions, issuers of the
security being traded, or other broker-dealers. Trust companies are excluded from the definition
of broker-dealer; the place of business is irrelevant.
Jackie Jackson is an agent with Hamilton Securities Co, an SEC-registered broker-dealer.
Jackie's father, Andy, founded a start-up venture several years ago and the company, with
Andy as its CEO, had its initial public offering 4 months ago. Jackie wishes to recommend
shares of this company to clients, Jackie
would have to disclose the potential conflict of interest
When an immediate family member is in a control position with a recommended security, the
agent must make disclosure of the potential conflict of interest. Consent of the client is not
,required, and we don't have enough information to know anything about the risk profile of this
company that would require greater a suitability standard. Trades are approved by principals, not
recommendations.
Under the Uniform Securities Act, an application for registration as an agent will, in the
absence of any order, become effective
at Noon of the 30th day after filing
Unless accelerated by the Administrator, registration as an agent (or BD, IA, or IAR),
becomes effective at Noon of the 30th day after submission of a competed application.
Registration remains in effect until the renewal date of December 31st.
Under the USA, a person who has passed the appropriate NASAA examination but whose
license has not yet been issued can participate in
giving a seminar on the benefits of whole life insurance versus term insurance
A person who has passed the NASAA exam cannot transact securities business until the
Administrator notifies the employer that the registration is effective. Insurance, unless variable,
is not a security.
Under the Uniform Securities Act, an officer who sells an issuer's nonexempt securities to
the public is considered
an agent of the issuer subject to registration
An officer of an issuer who sells the issuer's nonexempt securities to the public is acting as an
, agent and must register. Don't assume the sales are made in an exempt transaction unless
something indicates that to be the case. However, an officer who sells an issuer's
securities, exempt or not, to existing employees without compensation, is not an agent.
Which of the following transactions is NOT exempt from registration?
A sale of an exempt security to an individual customer as a result of an agent's solicitation
Solicited trades with individuals are not exempt transactions, even when the security being
traded is exempt. Transactions between issuers and underwriters or between underwriters are
exempt from registration and advertising filing requirements.A bona fide pledge of securities is
not a transaction and this question is looking for a nonexempt transaction. Transactions with
banks, savings and loan associations, and other financial institutions are exempt from
registration and advertising filing requirements.
Securities exempt under the Uniform Securities Act are exempt from
registration requirements
antifraud provisions of state securities laws
sales and advertising literature filing
I and III
An exempt security is exempt from the registration requirements and the provisions that
require the filing of advertising and sales literature. Exempt securities are never exempt from
the antifraud provisions of the act.
CORRECT ANSWERS
Which of the following persons are NOT excluded from the definition of, or exempt from
registration as, a broker-dealer under the Uniform Securities Act?
A broker-dealer with no office in the state that has no more than 5 retail clients resident in the
state within a 12 month period
Even without a place of business in a state, once a broker-dealer has even a single retail client
residing in that state, registration is required. Unlike investment advisers, there is no de minimis
exemption for broker-dealers. As long as a broker-dealer does not have an office in the state, it
is possible to qualify for exclusion from the definition. The primary requirement for the
exclusion is that the broker-dealer confines trading to financial institutions, issuers of the
security being traded, or other broker-dealers. Trust companies are excluded from the definition
of broker-dealer; the place of business is irrelevant.
Jackie Jackson is an agent with Hamilton Securities Co, an SEC-registered broker-dealer.
Jackie's father, Andy, founded a start-up venture several years ago and the company, with
Andy as its CEO, had its initial public offering 4 months ago. Jackie wishes to recommend
shares of this company to clients, Jackie
would have to disclose the potential conflict of interest
When an immediate family member is in a control position with a recommended security, the
agent must make disclosure of the potential conflict of interest. Consent of the client is not
,required, and we don't have enough information to know anything about the risk profile of this
company that would require greater a suitability standard. Trades are approved by principals, not
recommendations.
Under the Uniform Securities Act, an application for registration as an agent will, in the
absence of any order, become effective
at Noon of the 30th day after filing
Unless accelerated by the Administrator, registration as an agent (or BD, IA, or IAR),
becomes effective at Noon of the 30th day after submission of a competed application.
Registration remains in effect until the renewal date of December 31st.
Under the USA, a person who has passed the appropriate NASAA examination but whose
license has not yet been issued can participate in
giving a seminar on the benefits of whole life insurance versus term insurance
A person who has passed the NASAA exam cannot transact securities business until the
Administrator notifies the employer that the registration is effective. Insurance, unless variable,
is not a security.
Under the Uniform Securities Act, an officer who sells an issuer's nonexempt securities to
the public is considered
an agent of the issuer subject to registration
An officer of an issuer who sells the issuer's nonexempt securities to the public is acting as an
, agent and must register. Don't assume the sales are made in an exempt transaction unless
something indicates that to be the case. However, an officer who sells an issuer's
securities, exempt or not, to existing employees without compensation, is not an agent.
Which of the following transactions is NOT exempt from registration?
A sale of an exempt security to an individual customer as a result of an agent's solicitation
Solicited trades with individuals are not exempt transactions, even when the security being
traded is exempt. Transactions between issuers and underwriters or between underwriters are
exempt from registration and advertising filing requirements.A bona fide pledge of securities is
not a transaction and this question is looking for a nonexempt transaction. Transactions with
banks, savings and loan associations, and other financial institutions are exempt from
registration and advertising filing requirements.
Securities exempt under the Uniform Securities Act are exempt from
registration requirements
antifraud provisions of state securities laws
sales and advertising literature filing
I and III
An exempt security is exempt from the registration requirements and the provisions that
require the filing of advertising and sales literature. Exempt securities are never exempt from
the antifraud provisions of the act.
