Series 63 - Questions
Included in the USA's definition of exempt transaction would be any transaction by any of the following EXCEPT one by
A guardian
An IA is meeting with a new prospect. Which of the following performance data could be presented?
All of your accounts you have managed
A Canadian broker/dealer wanting to do security transactions with his clients who are vacationing in the United States.
Do not open an office but register in the states the clients are vacationing.
An agent overhears that XYZ, INC. will report negative earnings this quarter. According to NASAA's Statement of Policy on Ethical Behavior the agent may
Do nothing
Under the USA, if an agent in Delaware calls a prospective client in Virginia recommending the purchase of a listed security, the Administrators of which state(s) has(have) jurisdiction?
Both Delaware and Virginia
The Administrator may require a minimum net capital from which of the following?
Broker Dealer
According to NASAA's Statement of Policy on Ethical Behavior, all of the following are prohibited sales practices EXCEPT:
Buying on one exchange and selling on another.
Under the Uniform Securities Act, if a surety bond is required, which of the following can be substituted?
Cash or securities.
Which of the following persons is defined as an agent by the USA
Clerk at a BD who is authorized to take orders
When an issue is registered with the SEC under the Securities Act of 1933, it is also registered within the states under:
Coordination
according to the uniform securities act, which of the following is required to register as an agent of a BD
1) a partner of the BD who manages the firms ee's and all related activities 2) an ee of the BD whose major function is to take orders from the public on behalf of the firms owners 3) an ee of the BD who only trades securities for the BD's account.
an agent whose registration took effect Nov 11, 2008 would find that the first renewal would take place
12/31/2008
Under the right of rescission, a customer who was unlawfully sold a security, retains the right to sue for
3 years from the purchase or 2 years from the discovery of the infraction
under the USA, an investment adviser with no place of business in the state would be required to register if its only clients in the state are
6 or fewer individual clients
An IA of a state registered adviser delivers an Investment Adviser Brochure to a client at time of contract. According to the Uniform Security Act, this would be
Allowed, provided the client is given 5 days in which to cancel the contract
Under NASAA's Model Rule on Unethical Business Practices of Investment Advisers, Investment Adviser Representatives, and Federal Covered Advisers, an investment adviser may borrow money from which of the following clients? I A broker/dealer not affiliated with the adviser. II A bank not affiliated with the adviser. III A mutual fund not affiliated with the adviser. IV A close friend affiliated with the adviser.
I and II.
Which of the following statements regarding e-mail communications are correct? I. They are sometimes referred to as electronic communications II. Customer complaints received by e-mail are not considered to be in writing III. Once received and reviewed, they may be discarded IV. They must be retained in the same fashion as any other record
I and IV
Under the Uniform Securities Act, certain transactions are exempt from the sales literature and advertising filing requirements. Which of the following would be included in that category? I An isolated, non-issuer transaction. II A sale to a financial institution. III Any transaction by the executor of an estate. IV A transaction between an issuer and underwriters.
I, II, III and IV.
Under the USA, any partner, officer, or director of a registered investment adviser is an investment adviser rep if he: I) offers advice concerning securities II) manages client accounts or portfolios III) determines securities recommendations for representatives to disseminate IV) supervises personnel engaged in the above activities but does not sell these services to the public
I, II, III, and IV
An IAR works for a federally covered IA. The IA's main office is in State A. The IAR travels to see clients in State B. Under the U.S.A. , which of the following is(are) true?
IAR need not be registered in State B, and IAR needs to be registered in State A
Which of the following are exempt securities under the Uniform Securities Act? I Common stock, not listed on any regulated exchange, purchased by an open-end investment company. II Preferred stock issued by an insurance company authorized to do business in this state. III Municipal bonds issued by Toronto, ON. IV Private Placements.
II and III.
Under the USA, an investment adviser is all of the following EXCEPT:
II) a publisher of a financial newspaper IV) a CPA, who, as an incidental part of her practice, suggests tax-sheltered investments to her affluent client
under the USA, which of the following persons is responsible for proving that a securities issue is exempt from registration?
Issuer
If a state registered IA has its principal office in State B and three other states, the IA must:
Meet capital requirements of State B
A federally covered advisor has its home office in State A. It solicits 5 customers in State B and holds a seminar in state C. Which of the following is true?
Need not register in any State
Under NASAA's Model Rule on Unethical Business Practices of Investment Advisers, Investment Adviser Representatives, and Federal Covered Advisers, when may an investment adviser be given discretionary power to buy or sell securities for a client?
Only when the authority is specific, provided in advance, and specifies the amount, type, and timing of the transaction.
It would be considered an unethical and dishonest business practice for an agent registered with a broker/dealer to:
Purchase a stock for her own account knowing that a large institutional buy order is about to be processed for that same stock.
An agent of a B/D sells unregistered common stock to an Insurance Company that has no office in the state. According to the Uniform Securities Act, this would be:
Prohibited because the security is unregistered
Which of the following would be considered an exempt transaction?
The sale of common stock from an Issuer to a Broker Dealer that is not yet registered (issuer to underwriter = exempt)
Under the USA, if an agent in state A calls a prospective client who resides in State B while vacationing in State C and recommends the purchase of a listed security, the Administrators of which state(s) has (have) jurisdiction?
States A and C only
An IAR of a federal covered investment adviser splits his time between an office in State A and State D. The IAR has retail clients as follows: I. 16 clients in State A II. 12 clients in State B III. 6 clients in State C IV. 4 clients in State D
States A and D
A FINRA member broker/dealer is registered in 10 states. Regarding financial requirements, the B/D must meet those of
The SEC
A federally covered adviser has offices in 10 states. Regarding record keeping requirements, the IA must meet those of
The SEC
Which of the following statements regarding registration of securities by coordination is true?
The registration becomes effective at the state level concurrent with SEC registration if the Administrator has not entered an order to deny it
According to the Uniform Securities Act, the term" guaranteed" means, which of the following?
The security has a third party other than the issuer that guarantees the payment of principal and interest or dividends.
An agent wishes to be able to share in the profits and losses in a customer's account. Which of the following requirements must be met?
Written consent must be obtained from the client and the employing broker/dealer.
Under the USA, which of the following is considered a BD in a state?
XYZ BD with an office in the state whose only clients are insurance companies
Under the USA, the term person would include all of the following EXCEPT
a child prodigy
under the USA, all of the following may provide investment advice incidental to their normal business without having to register as an investment adviser EXCEPT
an economist
registration as an investment adviser would be required for any firm in the business of giving advice on the purchase of
convertible bonds
It would not be a prohibited practice under the Uniform Securities Act for an agent to tell a client that:
registered nonexempt securities may properly be sold in the state.
a BD hires two individuals to solicit an prequalify new customers for the firms newest branch office. Under the USA,
registration as agents is required
each of the following meet the USA's definition of an exempt transaction EXCEPT
sale of a new issue of a federal covered security to an individual customer
which of the following would NOT be included in the definition of federal covered security
stock issued by a life insurance company authorized to do business in the state
with regard to state-registered investment advisers, all of the following statements regarding the powers of the administrator are true EXCEPT
the administrator must be provided with a detailed description of the advisers proposed method of selecting investments
if an agent chooses to appeal an administrators order, when must he agent file fora review of the order with the appropriate court?
within 60 days after the entry of the order
registration statements for securities under the USA are effective for
1 year from the effective date
Which of the following is NOT included in the definition of a security in the Uniform Securities Act?
A $100,000 whole life insurance policy.
Under the Uniform Securities Act, when an IAR is acting in the capacity of trustee of a family trust executes a transaction on behalf of the trust, it is
A non-exempt transaction
An agent of a B/D whose home office is in state A, has a client in State B who has their mail forwarded to State C for the winter. Which of the following is true?
Agent must be registered in State A and B only
A state registered IA is acquired by a federally covered IA and all of the clients' accounts are then transferred to the federally covered IA. According to the Uniform Securities Act, this would be
Allowed, provided the clients have given written consent
The wife of a customer calls an agent to sell $25,000 worth of securities for a down payment on a house. Although the account is in her husband's name, she says her husband told her to sell the securities. To comply with NASAA's Statement of Policy on Dishonest and Unethical Business Practices of Broker/Dealers and Agents, the agent should:
Call the husband immediately and confirm the order.
If a federally registered IA has its principal office in State A and has offices in 3 other states and a client of the IAR who is registered in State A moves to a state in which the IAR is not registered then the IAR may
Continue business as usual since the IA is federally registered
According to National Securities Market Improvement Act, federal law pre-empts state law in all of the following, except
Enforcement of anti-fraud
ll of the following activities could result in the revocation of an agent's registration EXCEPT:
Failing to state all known facts about an investment when presenting it to a client.
An Administrator from State B wants to inspect records from a broker/dealer whose home state is in State A. Which of the following records may they inspect? I records of customers that reside in State B II Records of agents registered in State B III all records of the broker/dealer IV none of the records of the broker/dealer since their home office is in State A
I and II
Which of the following would be an agent under the terms of the USA? I) a sales rep of a licensed BD who sells securities in the secondary markets to the general public II) an assistant to the president of a BD who, for administrative purposes accepts orders on behalf of the senior partners III) a subsidiary of a major commercial bank registered as a BD that sells securities to the public IV) an issuer of nonexempt securities registered in the state that sold to the general public
I and II
When an existing client opens a margin account, there are additional documents to be completed. Which of the following are mandatory? I) the credit agreement II) the hypothecation agreement III) the loan consent agreement IV) the new account agreement
I and II the loan consent agreement is optional
According to the Uniform Securities Act, which of the following clients may an agent borrow from? I Bank II Best Friend III B/D Iv Mortgage Broker
I and III
An agent, sharing in commissions with another agent, may do so only if I disclose the arrangement and receive consent from his clients II both agents are registered in the same states III both agents are registered through the same or affiliated B/D IV disclose the arrangement and receive consent from the SEC
II and III
market manipulation is one of the prohibited practices under the USAct. Which of the following is an example of a BD engaging in market manipulation I) churning II) arbitrage III) wash trade IV) matched orders
III and IV
With regard to the NASAA Statement of Policy on Dishonest and Unethical Business Practices of Broker/Dealers and Agents, prohibited actions would include
III. Offering to repurchase a security at its original cost if it does not increase in value IV. Borrowing money from a client who was your college roommate
If an agent receives a written complaint in an e-mail from a customer and believes the complaint is entirely unfounded, the agent should:
Immediately present the e-mail to the agent's supervisor.
According to NASAA Statement of Unethical Behavior, which is a prohibited practice?
Informing a client a 12b-1 fee of 0.50% is a no load mutual fund.
Sharon Smith is an agent for a broker/dealer registered in all 50 states. Sharon receives an unsolicited order from a bank located in State X, a state in which she has no place of business. Under the Uniform Securities Act,
Sharon must be registered in State X in order to accept the order
Under the Uniform Securities Act, which of the following is responsible for notifying the Administrator when an agent changes his place of employment from one broker/dealer to another?
The agent, the former employer, and the new employer.
An individual employed by a federal covered adviser would be required to become registered as an IAR in the state if
The only clients receiving the individual's advice are large pension plans organized for employees of municipalities located in the state where that individual maintains an office.
An IA is registered in 10 states. Regarding financial requirements, IA must meet those of
The state in which their principal office is located (BECAUSE STATE)
a BD is registered in state X. It has no offices in state Y, although it does do business in that state. Under the USA, registration in Y required if the client is
an investment adviser representative
For the purposes of the definition found in Rule 501 of regulation D of the securities Act of 1933, the term accredited investor would not apply to
an investment advisor representative
during the application process for registration as an agent, the administrator may NOT request information about the applicants
annual income
which of the following statements regarding NA-SAA guidelines is NOT true?
at least once every 5 years, the administrators rules are subject to a relevancy review
Both an IA and an IAR register in August. They do not renew their registration until March 30th. Which of the following is true?
both registrations expired Dec 31st.
the purpose of the CIP is to
enable a BD to perform a reasonable belief that it knows the true identity of each customer
by rule, the administrator may
forbid an adviser from taking custody of client funds
under the USA, if a security is registered by qualification, the admin may require an agent to present the prospectus for a new issue to the offeree
prior to making the sale
registration is effective when ordered by the administrator in the case of registration by:
qualification
All of the following would meet the definition of investment adviser under the Uniform Securities Act EXCEPT
the publisher of a weekly magazine, sold on newsstands that contains at least 5 stock recommendations per issue.
According to the uniform securities act, an ee of a BD may sell securities as an unregistered agent
under no circumstances
which of the following must register as an agent
a individual representing a BD who sells commercial paper
the term agent would include
a minority stockholder whose only activity is soliciting new clients
In the absence of any other possible exemption, registration with the SEC would be prohibited for which of the following investment advisers?
a pension consultant managing $150 M
under the Uniform Securities Act, which of the following requires registration as an investment adviser representative?
a solicitor for an investment advisory firm who paid a fee for his services
which of the following accurately describes a cease and desist order as authorized by the USA
an administrator's order to refrain from a practice of business he believes to be unfair
Under the USA, an agent is
an individual representing a BD who sells securities exempt from registration under the act
An agent of a BD for the past 10 years decides to resign to go into business with her brother in law. Which, if any, are required to notify the state administrator?
both the BD and the agent
A Savings and Loan association, organized in State A and authorized to do business in State B, has an offering of common stock being made in State B. In order for an individual selling the offering to be excluded from the definition of agent in State B, the individual
could not sell without being an agent
records that must be kept by a BD include all of the following EXCEPT
customer tax returns
According to the Uniform securities Act, which of the following is considered a "sale"?
giving a security as a bonus, Entering into a contract to sell a security
IF a BD is selling shares of an affiliated company, under which of the following conditions could the BD sell these shares to an account over which the BD has discretion
if specific authorization is received from the customer
According to the Uniform Security Act, which of the following is not considered a person?
minor, deceased, or incompetent
The CEO of XYZ, INC. offers securities of his company to the public and to its employees and receives remunerations for the sale. According to the Uniform Securities Act, the CEO
must register as an agent of the Issuer
A publicly traded corporation offers its ee's an opportunity to purchase shares of the company's common stock directly from the issuer. A specific employee of the company is designated to process orders for that stock. Under the Uniform Securities Act, the ee:
must registers as an agent if he will receive commissions or remuneration either directly or indirectly
If cleared by the Administrator, and all other qualifications are met, an Agent's registration would become effective
noon on the 30th day
a BD in state A has it's license canceled. An agent for the BD may:
not conduct business because their license is automatically canceled along with that of the BD
as defined in the USA, each of the following would be considered an exempt transaction EXCEPT
pre-organization certificates are subscribed to by 9 investors in the state earning the agent a modest commission.
The Uniform Securities Act provides that the state Administrator may deny the registration of a broker/dealer for all of the following reasons EXCEPT that:
the applicant is not qualified due to a lack of experience.
under the USA, all of the following are exempt securities EXCEPT
unsolicited transactions (NOT US gov securities, bonds issued by Saskatchewan, securities of federal credit unions
which of the following securities is NOT exempt from the registration provisions of the USA?
variable annuities sold by a life insurance company authorized to do business in the state
opening a new account at a BD involves completing a new account form. Which of the following is NOT a required question on that form?
what is the clients marital status? (on it is legal age, citizenship, and employment)
