Series 63 Review
Intrastate offerings are effective for _____ years from the effective date. What can the issuer update as long as the fees and offering price stays the same?
1 year Can update the amount of secuirities
The Admin may suspend or revoke a registration based on info that was originally submitted in the application for the FIRST _____ days of registration
90 days
A stock that is listed on the New York Stock Exchange is A) exempt from state registration requirements B) approved for sale in the state of New York C) guaranteed to appreciate in value D) certain to pay dividends
A
If convicted of a willful violation of the Uniform Securities Act, an agent is subject to A) a fine of $5,000, imprisonment for 3 years, or both B) imprisonment for 5 years C) a fine of $10,000 D) disbarment
A
In which of the following cases must required documentation be received prior to any account activity? a. Discretionary account with a BD b. Discretionary account with an investment advisor c. Margin Account d. Options account
A
Under the Uniform Securities Act, investment advisory contracts A) must contain a description of fees B) are cancelable without penalty for 6 months after the customer signs C) must list each state in which the adviser is registered D) cannot be assigned without the Administrator's approval
A
Under the Uniform Securities Act, which of the following are exempt from the requirements to file advertising and sales literature with the Administrator? a. Any unsolicited transaction involving an exempt security b. Any unsolicited transaction involving a nonexempt security c. Any solicited transaction involving an exempt security d. Any solicited transaction involving a nonexempt security
A, B, and C
A type of fraud using social media where the fraudsters pretend to be member of a group, sometimes using respected leaders of the group to spread the word about the scheme is known as
Affinity Fraud
Which of the following securities are exempt from registration requirements under the Uniform Securities Act? a. Issues of U.S.-based insurance companies authorized to conduct business in the state b. NYSE traded issues c. Issues of nonprofit religious organizations d. Commercial paper meeting certain requirements
All of them
Felony vs Misdemeanor vs Civil vs Criminal
An application for registration can be denied i within the past 10 years the applicant has had a misdemeanor in securities law or any felony Consent to service of process ONLY applies to Civil Securities related actions
According to the USA, under which of the following circumstances may an Administrator cancel an agent's registration? A) The Administrator determines it would be in the public interest. B) The agent is judged to be mentally incompetent. C) The agent is the subject of an insider trading lawsuit. D) The agent has admitted to selling unregistered exempt securities to individual clients.
B
Under the USA, all of the following are exempt transactions EXCEPT A) transactions between an issuer and an underwriter B) the sale of municipal bonds to a retail customer C) private placements D) transactions with a trust company
B
When/how do Broker/Dealers and IAs get discretionary authority
BDs - need written consent IA - verbal consent works for 10 days, then need written consent
Rules on sharing in customer accounts for BDs and IAs
BDs - requires permission from the firm and the customer IA - NEVER ALLOWED
For Broker/Dealers and IAs, when do they disclose their Capacity in a trade?
BDs - upon trade execution IA - before the trade is entered
An individual would NOT be considered an agent under the USA if he engaged in which of the following? A. An unsolicited transaction with an institutional client for a stock listed on the NYSE B. Transactions between an issuer and ordinary investors in a non-exempt security C. A transaction between an issuer and the underwriters D. Transactions between an issuer and savings institutions or trust companies
C and D
An agent may borrow securities from a customer A) with the customer's oral permission B) only in connection with an exempt transaction C) only with the customer's written permission D) only if the client is in the business of lending securities
D
Simus Fund, a new open-end investment company, is preparing its registration statement with the SEC. Under the provisions of the NSMIA, this company would qualify for sale in a state by A) qualification B) securitization C) coordination D) notice filing
D
When a broker-dealer's registration under the Uniform Securities Act is revoked, which of the following occur? A) The Administrator will choose a local broker-dealer to oversee activities of the agents until the broker-dealer's registration is reinstated. B) Registrations of agents of the firm are still in effect. C) The agent's registration is held in escrow until a hearing. D) Registrations of agents of that firm are no longer in effect.
D
Under the Uniform Securities Act, an agent who offers a nonexempt, unregistered security for sale A) may be subject to criminal prosecution even if the transaction is exempt B) may do so legally in a nonexempt transaction as long as the purchaser is given all the material facts C) is not in violation of the act even if the transaction is not exempt, unless a sale is actually made D) may be civilly liable to the purchaser if the transaction is not exempt
D An unregistered, nonexempt security may only be offered or sold in an exempt transaction.
How is termination of an Agent different than termination of an IAR
Everyone (broker, agent, new broker) has to notify the admin when an agent leaves For an IAR, if the IA is state registered then the IA will notify the IA. However, if it is a Federally registered IA then the IAR must notify the admin.
What types of transactions are NOT subject to the advertising and sales literature filing requirements of the Admin?
Exempt transactions
FinCEN Form 112
Form for large cash transactions used to fight against money laundering
Entanglement / Adoption
The entanglement theory means the firm or its personnel is entangled with the preparation of the third-party post adoption is when the broker-dealer explicitly or implicitly endorsed or approved the content posted by the third party.
For securities issued by a charitable organization to be exempt, the charity must be ______
a nonprofit
Exempt Securities Two examples and what are they NOT exempt from
a security that does not need to be in compliance with the Securities Act of 1933 or the USA. Examples are US government and muni securities No security is exempt from the antifraud provisions of any securities legislation
When can Commercial Paper qualify as an exempt security:
if the min denomination is 50,000 has a maturity of not more than 270 days is rated in 1 of the 3 highest rating categories by a nationally recognized rating agency
Right of Recission
if the seller of securities discovers that he has made a sale in violation of the USA, the seller may offer to repurchase the securities from the buyer. The buyer is offering the Right of Recission. To satisfy the Right of Recission, the amount paid back to the buyer must include the original purchase price and interest at a rate determined by the Administrator.
An agent cannot lawfully sell an unregistered, nonexempt security other than ______
in an exempt transaction
Unless an exception is granted by the Admin, it is prohibited for an agent to share commissions with any person NOT _____
registered as an agent for the same or affiliated broker-dealer
A security offered as a bonus with the purchase of a retail item would be considered a ______
sale
Letter of Recission
the seller can avoid a lawsuit through a letter of recission The buyer has within 30 days to respond. If he doesnt respond, he forfeits the right to pursue a lawsuit at a later date
Investment Advisors are only required to post surety bond when _____
they maintainn custody or have discretionary authority
Guaranteed Security
where the payment of interest and principal (bond) or dividend (stock) is guaranteed by a party other than the issuer