Series 63
Under the Uniform Securities Act, an individual representing an issuer in the sale of which of the following securities would NOT have to register as an agent?
1. Short term highly rated commercial paper 2. Municipal bond 3. U.S. bank issue 4. Investment contract issued in connection with an employee's stock purchase, savings, pension, profit-sharing, or similar benefit plan
When submitting an application for registration as a broker-dealer, which of the following must be disclosed
1. form of business organization 2. any felonies or certain misdemeanors on the records of partners or officers 3. business history of the principals of the firm 4. financial information on the firm
Investment advisor
1. gives advice on securities 2. in the business- doesn't have to be sole business or primary business, Just have to be some regularity. 3. Receives compensation (direct or indirect)- fee, commission, or subscription
If an investment adviser representative is engaged in criminal activity while violating a rule under the Uniform Securities Act, but had no knowledge of the rule violated, the maximum penalty that may be imposed is a
5,000 fine
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
ABC Corporation, a newly formed company, has filed a registration statement with the SEC under the Securities Act of 1933. If they wish to use coordination to register in this state, which of the following statements is TRUE?
A statement of the maximum and minimum proposed offering prices and maximum underwriting discounts and commissions must be on file with the Administrator for two full business days prior to the date the federal registration statement becomes effective.
Which of the following would be required to register as an agent under the Uniform Securities Act?
A trader who is authorized to handle customer orders An individual who makes cold calls to pre-qualify prospects and lets a principal in the firm handle all customer trades
Except as limited by the Securities Exchange Act of 1934, the state securities Administrator may require, by rule or order, that broker-dealers make or maintain which of the following records?
Account ledgers Correspondence Papers and memoranda Blotters and books
Which of the following statements is TRUE?
An Administrator may, at the request of a registrant, hold hearings in private.
Under the Uniform Securities Act, requirements for registration may include which of the following?
An announcement of the application for registration in one or more newspapers in the state Minimum capital requirements for broker-dealers who do not have custody of client securities or funds
With regard to the registration requirements of the Uniform Securities Act, which of the following statements are TRUE?
An application for registration must indicate the amount of securities to be issued in the state. The Administrator may require registrants to file quarterly reports.
Final order
Appropriate prior notice to the interested parties The opportunity for a hearing; and Written findings of fact and conclusions of law
All of the following are exempt from the registration requirements of the USA
B) a closed-end investment company registered under the Investment Company Act of 1940, but not traded on a recognized stock exchange C) a Canadian government bond D) a unit investment trust, (UIT), registered under the Investment Company Act of 1940, whose portfolio consists exclusively of Georgia municipal bonds
When does a customer have to receive the options disclosure document?
Before or at the time the firm approves that customer's account or accepts the customer's order to trade options covered by the ODD
Which of the following actions should be taken by an agent when a client decides to open an options account?
Before the first options trade, review with the client the risks involved when trading options
Under the Uniform Securities Act, which of the following is considered an exempt transaction?
Sales to institutions, sales by fiduciaries, or unsolicited transactions
Which of the following persons is defined as an agent by the Uniform Securities Act?
Clerk at a broker-dealer who is authorized to take orders
In October 1987, the SEC promulgated Release IA-1092, which had the effect of broadening the definition of investment adviser. As a result of the Release, which of the following would NOT be included in the definition?
Commercial banks offering a full range of advisory services for their high-net-worth clients
Which of the following is required to be maintained by financial institutions such as banks and broker-dealers (BDs) by the USA PATRIOT Act to prevent the financing of terrorist operations and money laundering?
Customer identification programs (CIPs)
Which of the following constitutes an offer or sale of stock?
Gift of assessable stock Purchase of shares through the exercise of a warrant
When a brokerage firm sells stock from its own inventory, it is acting in the capacity of
a principal, and charges a markup
As an incentive to encourage clients to invest in a particular stock recommended by the broker-dealer, clients are told that any time within 6 months after the purchase date, they may sell the stock back to the firm at original cost plus interest at the state's legal rate. This would be
a prohibited guarantee against loss
An agent of a broker-dealer is currently doing business in one state and would like to conduct business in another state. When checking with the firm's compliance department, the agent would be told which of the following?
If the agent is a partner, officer, or director and held that position at the time the broker-dealer was registered in that state, the individual need not register separately.
The Uniform Securities Act holds that persons performing certain activities shall be registered as investment adviser representatives. That requirement would apply to which of the following?
John, who opens an investment advisory firm where he devotes his time exclusively to management responsibilities as the sole proprietor of the firm
State securities Administrators may NOT impose which of the following?
Minimum net worth levels on registered investment adviser representatives
Which of the following terms pertains to registration with the Administrator of a mutual fund, closed-end investment company, or unit investment trust that is registered under the Securities Act of 1933 and also registered as an investment company under the Investment Com
Notice filing
While several methods of registration are described under the Uniform Securities Act, which of the following would be most appropriate for federal covered securities?
Notice filing
Which of the following statements relating to termination of registration of a securities professional registered under the USA is TRUE?
Once the withdrawal is effective, the Administrator retains the right to commence an action for a period of one year.
When a broker-dealer registers with the state Administrator, which of the following agents are automatically registered with the state?
Partners, directors, and officers of the broker-dealer
Under the Uniform Securities Act, which of the following regarding the registration of securities is TRUE?
Registration by qualification becomes effective on a date ordered by the Administrator.
Which of the following statements concerning the registration of an agent for a broker-dealer is TRUE?
Registrations expire on December 31 each year unless renewed.
Sharon Smith is an agent for Highwater Securities, 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
Peter Smith, a prominent securities lawyer living in Connecticut, conducts his securities law practice full time in New York state. He must register as an investment adviser in New York state if
Smith's clients, none of whom are residents of New York, receive investment advice as an integral part of Smith's legal services
XYZ Securities Co. is simultaneously registering as a broker-dealer with the SEC and several states. Which of the following statements regarding its registration under the Uniform Securities Act is CORRECT?
State registrations expire annually on December 31.
Which of the following statements concerning transactions exempt from registration under the Uniform Securities Act is TRUE?
The antifraud provisions of the Uniform Securities Act apply to exempt transactions.
Under the Uniform Securities Act, which of the following statements regarding the limited offering exemption is TRUE?
The security that is the subject of the private placement need not be registered.
The Uniform Securities Act provides an exemption from registration for certain securities and for certain transactions. However, the Administrator is not empowered to deny an exemption from state registration to
U.S. government securities municipal bonds issued by another state
Jon, an agent with Johnson-Bayer Securities, was reacting to peer pressure to use email as a prospecting tool. He decided to highlight the exciting new process for drug delivery which was covered in the new offering prospectus when explaining why he felt the issuer found the next "aspirin." He summed up the email by stating potential investors needed to act quickly to get in on the ground floor. His decision to do so fell into the category of which of the following?
Unethical business practice
Under the Uniform Securities Act, when must a consent to service of process be filed with the Administrator?
With the original application only
Under the Uniform Securities Act, all of the following are exempt from state registration as investment advisers EXCEPT
a financial planner who provides fee-based investment advisory services to clients and currently has a total of $18 million in assets under management
Disclosure to customers of a broker-dealer's control relationships is required in
agency transactions principal transactions exempt transactions
A consent to service of process required by an Administrator is
an agreement whereby a registrant will be bound by any legal action or subpoena served on the Administrator as if it had been served on the registrant
Under the Uniform Securities Act, a person whose business model is selling reports on a subscription basis concerning specific securities to investors based on their individual objectives will be defined as
an investment adviser
Broker dealer-
any person engage in the business of effecting transactions in securities for the account of others or for its own account.
Issuer-
any person who issues or proposes to issue any security. Corporation, federal or state government, foreign government, partnership, nonprofit, cooperative. With respect to certificates of interest or participation in oil, gas, mining titles or leases, there is not considered to be any issuer.
On determining that a registrant or applicant for registration is no longer in existence or has ceased doing business as either an agent or a broker-dealer, the Administrator may
cancel the registration or application
Under the Uniform Securities Act, the Administrator has the power to deny, suspend, or revoke the registration of an issue if it is in the public interest and
the Administrator of another state has revoked the issue's registration an officer of the registrant has been convicted of a securities related crime
administrator
has complete responsibility for administering the securities laws of the state
The Uniform Securities Act defines an investment adviser and specifies the conditions under which registration with the state is required. There are, however, cases where an exemption from registration is offered. For example, it is NOT necessary for an investment adviser to register when it
has no place of business in the state and advises only savings and loan associations
Offer and offer to sell-
include every attempt or offer to dispose of, or solicitation of an offer to buy a security. Trying to make sell.
Person-
individual corporation, partnership, association, joint stock company, or trust where the interest of the beneficiaries are evidenced by a security, an unincorporated organization, a government or a political subdivision of a government
Under the Uniform Securities Act (USA), a person is best defined as a(n)
individual or entity considered able to enter into an enforceable contract
loan consent agreement allows
loan out the customer's margin securities
Global Investment Strategies (GIS) is a broker-dealer registered in 6 states. GIS would have to meet the financial and recordkeeping requirements of
the Securities and Exchange Commission
When registering a security under the Uniform Securities Act, the registrant must indicate all of the following
the amount of securities to be offered in the state all other states in which the security is to be register adverse rulings by a court, regulatory authority, or the SEC with respect to the offering
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
An individual representing the issuer in the sale of that issuer's securities to the public would have to register in this state if
the issuer is a federal savings and loan association authorized to do business in this state
In a margin account, broker-dealers lend money to clients to enable them to leverage their investments. The account document that is evidence of the debtor-creditor relationship is
the credit agreement
The Uniform Securities Act invests the Administrator with many powers over the activities of agents and broker-dealers. Which of the following actions does NOT fall within the Administrator's powers?
Suspending an agent's registration without an opportunity for a hearing
The RAN Corporation's common stock is listed on the New York Stock Exchange. To raise additional working capital, RAN's board of directors has authorized the sale of $75 million in subordinated debentures. Under the Uniform Securities Act, which of the following is a true statement?
The Administrator can require that the issuer provide a notice filing in the state. B) The Administrator can bring an enforcement action against the issuer if it is deemed that the issue is fraudulent. C) The Administrator may require a filing fee be paid prior to sales taking place in the state.
Under the Uniform Securities Act, an issuer is any person who issues or proposes to issue a security for sale to the public. According to the USA, which of the following is NOT an issuer?
The Energy Resources Partnership, which issues certificates of interest or participation in its oil, gas, and mining titles
Under the USA, all of the following issues would be exempt from registration
an investment contract issued in connection with an employee stock purchase plan stock issued by savings and loan association authorized to do business in this state bonds issued by the city of New Orleans
All of the following are nonissuer transactions
broker-dealer A sold 5,000 shares of Dell Computer from inventory to broker-dealer B B) Joe Smith sold 100 shares of Apple Computer to his neighbor, Kevin Jones, in a private transaction D) Monster Insurance Company sold 10,000 shares of IBM to KLM Investment Bankers, Inc., through INSTINET
All of the following are exempt from state registration under the Uniform Securities Act
debt securities variable annuities bonds
Exempt security
doesn't have to be registered in order to be sold, and there are no requirements to file advertising about the security with the administrator
A client of a broker-dealer files a civil suit claiming damages for sale of an unregistered security. During the proceedings, the client suffers a fatal stroke. The suit
is continued by the deceased's executor
Under the Uniform Securities Act, a broker-dealer is defined as any person who
is in the business of effecting securities transactions for its own account or for the accounts of others
ABC Securities is a broker-dealer registered with the SEC and domiciled in State X. ABC Securities would not be defined as a broker-dealer in State Y under the Uniform Securities Act if it had no offices in State Y and
its only clients were insurance companies its only offer to State Y residents was through radio advertisements originating in State X but received in State Y it occasionally engaged in firm commitment underwriting with issuers based in State Y
Non issuer
means not directly or indirectly for the benefit of the issuer. Simply stated a non-issuer transaction is one where the issuer does not receive the money because the seller of the security is someone other than the issuer.
Non persons=
minors, deceased individuals, individuals declared mentally incompetent
An investment adviser need not register in a state if it has
no place of business in the state and only advises thirty-three insurance companies located in the state
An agent in this state would be acting illegally if he sold
nonexempt securities properly registered in a neighboring state but not registered in this state
Exempt transaction
one in which the nature of the sale is such that registration with the administrator and filing of advertising material is not required in order for that transaction to take place.
Security
quite broad and includes those items one normally thinks of as securities (stocks, bonds, debentures, mutual funds, variable annuities.
Under the NSMIA, the term "federal covered adviser" includes a person
registered with the SEC under the Investment Advisers Act of 1940 excluded from the definition of an investment adviser under the Investment Advisers Act of 1940
Investment advisers who manage investment portfolios that total less than $100 million must register with
state
Blue sky laws
state securities laws
A broker-dealer publishes a list of securities it approves for inclusion in IRAs. This means
the broker-dealer has evaluated these securities and believes they would be suitable for inclusion for retirement planning
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
Guaranteed
to payment of principal, interest, or dividend but not capital gains.
Under the Uniform Securities Act, an employee of a licensed broker-dealer firm is allowed to sell securities as an unregistered agent when
under no circumstances
An individual may NOT act as an agent for more than one broker-dealer
unless the Administrator, by rule or order, authorizes such employment
Stop order
used to deny effectiveness to, or suspend or revoke the effectiveness of, any registration statement.