Series 63 Practice Exam
Which of the following is NOT exempt from registration as an investment adviser or an investment adviser representative in the state in which a place of business is maintained? 1. A certified financial planner who prepares financial plans and whose only compensation is commissions. 2. An insurance agent who prepares comprehensive financial plans and receives commissions on any insurance products purchased by his clients. 3. A broker-dealer exclusively engaged in retail securities transactions in the state 4. The SWW Growth Fund, a mutual fund with an office and shareholders in the state A) I and II. B) I, II, III and IV. C) III and IV. D) I only.
A) I and II.
You are a registered agent with Goldmen Sax, a well-respected broker-dealer. In order to help you purchase a home, your mother, who happens to be one of your clients, offers to lend you the down payment. A legal document is drawn up whereby your mother is granted a 2nd lien on the home and the interest charged on the loan complies with IRS regulations. Under the Uniform Securities Act A) this loan can only be made with the approval of your employer B) this loan is permitted because it is properly structured C) loans between immediate family members, even those who are clients, are exempt from the purview of the act D) this loan is prohibited
A) this loan can only be made with the approval of your employer
Under the NASAA Model Rule dealing with sales of securities at financial institutions, an advertisement prepared for use in a radio broadcast would have to include certain mandatory disclosures unless the broadcast was A) 45 seconds or less B) 30 seconds or less C) 90 seconds or less D) 60 seconds or less
B) 30 seconds or less
Which of the following individuals would be most likely to be willing to sell securities for the benefit of the issuer without receiving any compensation based upon those sales? A) An investment adviser representative B) A member of the issuer's board of directors C) A registered broker-dealer concentrating on investment banking D) A salaried individual working in the broker-dealer's order room
B) A member of the issuer's board of directors It is common for small companies to sponsor their own public offering using officers and board members to sell the shares.
Jacques is registered as an agent with Mount Royal Securities, a Canadian broker-dealer located in Quebec City with no offices in the United States. One of Jacques's clients who has a Canadian tax qualified retirement plan has recently made a permanent move to Arizona. Which of the following statements is TRUE? A) Jacques must register with both FINRA and the State of Arizona even though Mount Royal Securities is not registered. B) Both Jacques and his broker-dealer would have to obtain limited registration in Arizona and could continue to deal with this client on a permanent basis. C) Under no circumstances is Jacques permitted to have any dealings with this client once residence in Arizona has been effective more than 30 days. D) Jacques's current Canadian registration is sufficient to deal with a client who moves to another country.
B) Both Jacques and his broker-dealer would have to obtain limited registration in Arizona and could continue to deal with this client on a permanent basis.
Myra Johnson is an investment adviser representative with a federal covered investment adviser. Her former college roommate, and very close friend, has approached Myra about opening an individual account where the two of them can share in the profits and losses. In order to be in compliance with the regulations A) they must open the account in Myra's name B) Myra must inform her friend that this may not be done C) they must share in proportion to the amount of their invested capital D) Myra must have permission of her employer IA
B) Myra must inform her friend that this may not be done Unlike agents of broker-dealers, IAs and their representatives can never share in the profits and losses of an account with a customer
Under the Uniform Securities Act, an investment adviser with an office in a state A) may only share in the profits or losses in an account with a client if the client consents and the sharing is based in proportion to the amount invested B) must register its investment adviser representatives who work in that office with the Administrator even if the investment adviser is federal covered C) may not employ others without registering them with the Administrator D) need not register if its only clients in the state are insurance companies or banks
B) must register its investment adviser representatives who work in that office with the Administrator even if the investment adviser is federal covered
A broker-dealer maintaining custody of its customers' funds and securities A) must notify the Administrator that it is maintaining custody B) will generally be required to post a surety bond or meet minimum net capital requirements C) is required to report the status of their accounts to them no less frequently than annually D) is not permitted to charge for this service
B) will generally be required to post a surety bond or meet minimum net capital requirements
Under the provisions of the Uniform Securities Act, as amended, a gift of nonassessable stock would be which of the following? A) An offer and a sale B) A potential liability to the recipient C) Permitted only if the security or the transaction were exempt D) A gift
D) A gift
A broker-dealer with no place of business in the state would not be exempt from registration if his only clients in the state were A) investment companies registered under the Investment Company Act of 1940 B) other broker-dealers C) property and casualty insurance companies D) individuals meeting the accredited investor standard
D) individuals meeting the accredited investor standard
An agent registered with a broker-dealer in the state has had his license enjoined. This means A) a revocation of the agent's license is pending until re-registration is authorized B) the agent's application for membership in the local securities dealers association has been accepted C) the Administrator has used the power of the office to issue an injunction against that agent D) the individual is prohibited from acting as an agent pending the results of a hearing
D) the individual is prohibited from acting as an agent pending the results of a hearing
Abigail Jefferson has recently obtained her MBA in finance from a prestigious Ivy League University. She has just been hired by Wentworth, Witherspoon, and Wilson, LTD, a Wall Street investment banking firm. While in the process of preparing to take her Series 63 examination to become licensed as an agent for WWW, Ltd, she would be permitted to A) accept unsolicited orders from existing clients B) pre-qualify potential clients C) conduct seminars discussing WWW's current recommendations D) update client account records
D) update client account records While registration is pending, all the applicant can do is perform functions that would never require registration, such as clerical andadministrative work.
An agent is registered with XYZ Discount Brokers, a wholly owned subsidiary of the XYZ Bank Holding Company. The holding company also owns XYZ Capital Markets, a full service broker-dealer. Under the provisions of the Uniform Securities Act, this agent would be permitted to split commissions A) exclusively with other agents registered with XYZ Discount Brokers B) with any agent properly registered with the Administrator of the state C) with a client in a joint account as long as consent has been received from the client and the employing broker-dealer D) with an agent employed by XYZ Capital Markets
D) with an agent employed by XYZ Capital Markets Agents are only permitted to split commission with other agents registered with their broker-dealer or affiliated broker-dealers under common control