Series 66 Chapter 3
Under the Uniform Securities Act, it is required to file an application with the Administrator to become a registered broker-dealer in the state. Among the disclosures that must be made on that application are the form of business organization to be used by the firm any felonies or certain misdemeanors on the records of partners or officers business history of the principals of the firm financial information about the firm
1, 2, 3, 4
One of the terms defined in the Uniform Securities Act is "broker-dealer." Which of the following is NOT included in that definition? An individual employed by a corporate entity to open new customer accounts for the purpose of trading securities A business entity seeking to raise additional capital using the regulated securities markets A person whose primary function is buying securities for his own account and for the accounts of others A person whose primary function is providing advice on what assets belong in clients' investment portfolios
1, 2, 4
Information required on an application for registration as an agent would include the form of business (corporation, partnership, LLC, etc.). felony convictions, whether securities related or not. a statement of financial condition. citizenship information.
2, 4
A broker-dealer is registered in States A and B. An agent of theirs is registered in State A, and one of the agent's clients moves from State A to State C. If the agent wishes to continue to do business with this client, which of the following statements is CORRECT? A)Both the broker-dealer and the agent must register in State C. B)As long as they have 5 or fewer retail clients in State C, neither the broker-dealer nor the agent must register there. C)Only the broker-dealer must register in State C. D)Only the agent must register in State C.
A
Under federal law, which act regulates the activities of broker-dealers and associated persons? A)Securities Exchange Act of 1934 B)Investment Company Act of 1940 C)Uniform Securities Act D)Trust Indenture Act of 1939
A
Under the USA, all the following statements regarding the registration of agents are true EXCEPT A)if a broker-dealer's registration is revoked by a state, it has no effect on the agent's registration B)an agent can only sell securities that have been registered in a state or that are exempt from registration C)a nonresident agent can solicit business in another state only if the agent and the broker-dealer are registered in that state D)if an agent resigns and affiliates with another broker-dealer, both firms and the agent must notify the Administrator
A
Under the USA, an individual would not be considered an agent while representing the issuer in any of the following transactions EXCEPT A)nonexempt, initial public offerings B)issuers in exempt transactions C)investment contracts issued in connection with an employee's stock purchases, savings, pension, profit-sharing, or similar employee benefit plan D)promissory notes, such as commercial paper, with a maturity of nine months or less
A
Broker-dealer A wants to promote and reward teamwork. The firm plans to pay out a small percentage of the firm's profits to the clerical staff as a bonus for their hard work. Under NASAA rules, is this permitted? A)Yes, no registration is necessary. B)No, this cannot be done. C)Yes, if all of the agents agree to it. D)Yes, if the entire clerical staff is registered as agents for the firm.
A Bonuses based on a broker-dealer's profits may be payable to nonregistered clerical help as long as there is no direct relationship to any specific sales.
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, A)Sharon must be registered in State X in order to accept the order B)because Sharon has no place of business in State X and the order is unsolicited, Sharon may accept the order without registering in State X C)because Highwater Securities is registered in all 50 states, Sharon must also be registered in all of them D)because Sharon has no place of business in State X and the client is an institution, Sharon may accept the order without registering in State X
A Regardless of whether the security is exempt or the transaction is exempt, one must be licensed in any state that is the domicile of a client placing an order. One does not have to be registered as an agent in every state the BD is, only in those where she expects clients to reside.
First Growth Securities, Inc., a member of the Financial Industry Regulatory Authority (FINRA), has its main office in Illinois and is therefore A)required to register as a broker-dealer in the state of Illinois B)registered by FINRA to sell securities in Illinois C automatically registered as a securities agent in Illinois D)a registered investment adviser licensed to sell securities in Illinois
A Securities firms that are members of FINRA must register as broker-dealers in the states in which they conduct business. Under the USA, broker-dealers are firms engaged in the business of effecting security transactions in customer or proprietary accounts. A broker-dealer is not a registered investment adviser, although many broker-dealers own separate legal subsidiaries that are investment advisers. FINRA does not license its members to conduct business in the states; the state securities licensing agent is the state securities Administrator. Also, a broker-dealer is not an agent; an agent is a person who is employed by a broker-dealer to conduct securities transactions as a representative of the broker-dealer.
A broker-dealer would most likely hire an agent to A)engage in marketing for the broker-dealer B)sell securities to clients C)implement the firm's new recordkeeping program D)solicit for advisory clients
B
A local customer of broker-dealer A is on vacation in Nevada. Broker-dealer A, who is registered in and maintains offices only in Florida, wishes to make the customer aware of an investment opportunity that has just become available. Which of the following is TRUE? A)Broker-dealer A must notify the Nevada Administrator before calling this customer in Nevada. B)Broker-dealer A may solicit this customer in Nevada. C)Broker-dealer A may not solicit this customer in Nevada unless the broker-dealer has a branch office registered in Nevada. D)Broker-dealer A may not solicit this customer in Nevada unless broker-dealer A and the agent making the call are registered in Nevada.
B
Creative Financial Solutions (CFS) is a broker-dealer registered with the SEC. CFS has its principal and only office in State A. CFS also does business with clients in State B. Which of these clients would cause CFS to have to register in State B? A)A mutual fund registered with the SEC B)4 retail clients residing in State B C)15 other broker-dealers D)6 banks doing business in State B
B
Hal owns a successful plumbing business. If he engages in a substantial amount of short-term trading in stocks for his own benefit, he would be considered A)an institutional investor B)an individual investor C)a dealer D)an accredited investor
B
It would not be a violation of the Uniform Securities Act for an applicant for registration as an agent to do which of the following while the application is pending? A)Conduct seminars on asset allocation B)Sell fixed annuities C)Use a preliminary prospectus to obtain indications of interest for a new issue but wait until he is registered before accepting any orders D)Limit his sales activity to immediate family members only
B
Under the Uniform Securities Act, the Administrator may require a broker-dealer to post a surety bond of A)$10,000.00 B)an amount not in excess of that set by the SEC C)$50,000.00 D)$25,000.00
B Unlike investment advisers where the USA specifies posting a surety bond in the amount of $35,000, the Uniform Securities Act does not specify an amount for broker-dealers. However, the NSMIA states that the Administrator may not require a broker-dealer be bonded in an amount above that set by the SEC. Furthermore, bonds will not be required of broker-dealers that maintain a specified net capital.
A broker-dealer registered with State A created a website 2 years ago to promote its services. Recently, they hired a new media person who totally redesigned the site. Under the recordkeeping requirements of the Uniform Securities Act, A)there are no requirements for storage of electronic data B)a copy of the new website page must be maintained for a period of 3 years from the first use of the original site C)a copy of the original website page must be maintained for 3 years from original use D)copies of both the original and the new website page must be maintained for 5 years after original use
C
A broker-dealer would most likely hire an agent to A)solicit for advisory clients. B)implement the firm's new record keeping program. C)sell securities to clients. D)engage in marketing for the broker-dealer.
C
According to the USA, under what circumstances is an employee of a licensed broker-dealer in a state allowed to sell exempt securities as an unregistered agent? A)The securities are federal covered securities. B)The employee is not paid any commission or salary. C)Under no circumstances is an employee of a licensed broker-dealer in a state allowed to sell exempt securities as an unregistered agent. D)The transaction is exempt.
C
Under the USA, a person who has passed the appropriate NASAA examination but whose license has not yet been issued can participate in A)prospecting for new clients by mail B)accepting unsolicited orders C)filing payroll report D)prospecting for new clients in person
C
Which of the following persons is defined as an agent by the Uniform Securities Act? A)Secretary of a branch office sales manager B)Broker-dealer executive who does not solicit or transact business C)Clerk at a broker-dealer who is authorized to take orders D)Silent partner of a broker-dealer
C Anyone who solicits or receives an order while representing a broker-dealer is an agent. Silent partners, administrative personnel, and executives of broker-dealers with no sales responsibilities are not agents under the terms of the USA because they do not solicit or receive orders.
When would an individual employed by an issuer to sell its stock to the public have to register as an agent? A)When the employer is a savings institution B)When the employer is the U.S. Treasury C)When the employer is an insurance company D)When the transaction is exempt
C The question is not looking for the exemption - it wants to know when the individual must register. There are two instances where an individual employed by the issuer to sell its securities is not considered an agent. The first is when the issuer is one of 5 specific named cases. That list includes savings institutions (banks), and the federal governments of the United States and Canada, as well as any of their political subdivisions. The list does not include insurance companies. The second case is when the securities are being sold in an exempt transaction. From a practical standpoint, the most common case where this occurs is when the issuer makes a private placement of its shares.
When applying for registration as an agent, which of the following must be disclosed? A)Complete employment history for the past 5 years. B)Highest educational level achieved and the institution attended. C)Certain financial information such as any unsatisfied judgments or liens against the applicant. D)Residential history for the past 3 years.
C This question probably contains more detailed information than will be covered on the exam. Negative financial information, such as unsatisfied judgments or liens and bankruptcy filings must be disclosed. Employment history for the past 10 years and residential history for the past 5 years must be shown. If, during the past 10 years, the applicant was a full-time student, then that must be shown, but that is the extent of educational information required.
An agent lives in Montana and is registered in Montana and Idaho. His broker-dealer is registered in every state west of the Mississippi River. The agent's client, who lives in Montana, decides to enroll in a 1-year resident MBA program in Philadelphia, Pennsylvania. During the 1-year period, when the client is in Philadelphia, the agent may A)not deal with the client until the broker-dealer registers in Pennsylvania B)only accept unsolicited orders C)not conduct any business with the client D)conduct business with the client as usual
D
Anyone who represents an issuer in effecting transactions between the underwriter and the issuer: A)must be registered as an agent. B)must be registered as an administrator. C)must be registered as an investment adviser. D)is excluded from the definition of agent under the Uniform Securities Act.
D
Under the Securities Exchange Act of 1934, which of the following would NOT be considered associated with XYZ Corp., a broker-dealer? A)Paula, who is on XYZ's board of directors but who has no other connection with the firm B)Brian, an XYZ vice president C)Arvin, one of XYZ's agents D)Robert, a client who owns 1,000 shares of XYZ's voting stock
D
An agent is registered in Illinois and Ohio. One of her substantial clients has just moved from Ohio to Arizona, and the agent would like to continue to do business with her. Under the Uniform Securities Act, which of the following statements is TRUE? The agent's broker-dealer must already be registered in Arizona or complete the Arizona registration process within a time period specified by the act. The agent must complete the Arizona registration process within a time period specified by the act. The agent must ask the Ohio Administrator to request reciprocal registration from the Arizona Administrator. The agent must suggest that the client maintain a mailing address, such as a post office box, in Ohio.
1 + 2
Under the Uniform Securities Act, an agent registered in one state may transact business in another state in which he is not registered with which of the following? An existing client visiting the state for a 2-week period An existing client who moved to the state 6 months ago An existing client who moved to the state less than 30 days prior An acquaintance from another state who requests that the agent execute transactions on his behalf
1 + 3 An agent may conduct business in a state in which he is not registered if an existing client is visiting in that state or if the client has moved to the state within the past 30 days.
If Brokers, Inc., a broker-dealer registered in this state, refuses to comply with the Administrator's order to retain records for 2 years longer than required by the Securities Exchange Act of 1934, which of the following statements are TRUE? The securities Administrator cannot require registrants to retain books and records longer than required by the SEC. Brokers, Inc., is not in violation of the Securities Exchange Act of 1934. Both the securities Administrator and Brokers, Inc., are in violation of both the Securities Exchange Act of 1934 and the Uniform Securities Act. Brokers, Inc., must comply with orders issued by state securities regulators whether or not the orders are in compliance with the NSMIA.
1, 2
Which of the following statements is (are) TRUE regarding the jurisdiction of the SEC under the Securities Exchange Act of 1934? The SEC has jurisdiction over exchanges and SROs. The SEC has jurisdiction over broker-dealers, investment advisers, and associated persons that are required to be registered under federal law. The SEC has jurisdiction over banks and savings and loans regarding their securities activities.
1, 2 The SEC was created by the Securities Exchange Act of 1934 and has the responsibility of administering all federal securities laws. The SEC has jurisdiction over exchanges, SROs, and all persons required to be registered under federal law. The SEC does not enforce state securities statutes, nor does it have jurisdiction over banks or savings and loans regarding their securities activities. Banking authorities, such as the Federal Reserve Board, the Federal Deposit Insurance Corporation, and others, regulate banks and savings and loans.
Which of the following would be an agent under the terms of the Uniform Securities Act? A sales representative of a licensed broker-dealer who sells secondary securities to the general public An assistant to the president of a broker-dealer who, for administrative purposes, accepts orders on behalf of senior partners A subsidiary of a major commercial bank registered as a broker-dealer that sells securities to the public An issuer of nonexempt securities that are registered in the state and sold to the general public
1, 2 Under the USA, only an individual can be an agent (a person who sells securities for a broker-dealer). An administrative person, such as the assistant to the president of a broker-dealer, is considered an agent if that individual takes securities orders from the public. Corporate entities, broker-dealers, and issuers are all excluded from the definition of an agent.
Which of the following would be an agent as the term is defined in the Uniform Securities Act? An individual representing a registered broker-dealer in the sale of securities to the general public An assistant to the president of a broker-dealer who accepts orders from clients on behalf of the senior partners A subsidiary of a major commercial bank registered as a broker-dealer that sells securities to the public An issuer of nonexempt securities registered in the state and sold to the general public
1, 2 Under the USA, only individuals can be agents. A person who sells securities for a broker-dealer is an agent. An administrative person, such as the assistant to the president of a broker-dealer, is considered an agent if he takes securities orders from clients. Corporate entities are excluded from the definition of an agent. Broker-dealers and issuers are not agents.
Which of the following is(are) considered an associated person(s) of a broker-dealer under the Securities Exchange Act of 1934? Any employee of a broker-dealer, except for clerical or ministerial employees Any officer, partner, or manager associated with the broker-dealer Any employee, other than a clerical or ministerial employee, who is supervised by, supervises, or is under common supervision of the broker-dealer
1, 2, 3
Which of the following statements is NOT true? A broker-dealer must be a firm or corporation (legal person) as opposed to a natural person (human being). An investment adviser must be a firm or a corporation as opposed to a natural person. An investment adviser representative (IAR) cannot, under any circumstances, be employed by a registered broker-dealer.
1, 2, 3
Broker-dealers, investment advisers, agents, and investment adviser representatives who use the internet to distribute information on available products and services that are directed generally to anyone having access to the internet and transmitted through postings on bulletin boards, displays on homepages, or similar methods are not deemed to be transacting business in this state for purposes of the Uniform Securities Act solely on the basis of that fact if which of the following conditions are observed? The internet communication contains a legend in which it is clearly stated that the broker-dealer, investment adviser, agent, or IAR in question may transact business in this state only if first registered, excluded, or exempted from state broker-dealer, investment adviser, agent, or IAR registration requirements, as may be the case. The internet communication contains a legend in which it is clearly stated that follow-up; individualized responses to persons in this state by the broker-dealer, investment adviser, agent, or IAR that involve either the effecting or attempting to effect transactions in securities; or the rendering of personalized investment advice for compensation, as may be, will not be made absent compliance with state broker-dealer, investment adviser, agent, or IAR registration requirements, or an applicable exemption or exclusion. The internet communication contains a mechanism, including and without limitation, technical firewalls or other implemented policies and procedures, designed reasonably to ensure that before any subsequent, direct communication with prospective customers or clients in this state, the broker-dealer, investment adviser, agent, or IAR is first registered in this state or qualifies for an exemption or exclusion from such requirement. The internet communication does not involve either effecting or attempting to effect transactions in securities, or the rendering of personalized investment advice for compensation, as may be, in this state over the internet, but is limited to the dissemination of general information on products and services being offered.
1, 2, 3, 4
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
1, 2, 3, 4
Which of the following persons are 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 effects trades exclusively with other broker-dealers in the state A trust company with an office in the state that deals with the general public A broker-dealer with no office in the state that has no more than 5 retail clients resident in the state within the past year A broker-dealer with no office in the state that effects securities trades exclusively with trust companies or other broker-dealers
1, 2, 4 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 confine trading to financial institutions or other broker-dealers. Unlike with investment advisers, there is no de minimis exemption for broker-dealers. Trust companies are excluded from the definition of broker-dealer.
Which of the following persons are included in the definition of an agent under the Uniform Securities Act? An individual who represents First Securities Brokers, Inc., in selling shares of XYZ Corporation, a New York Stock Exchange listed company An individual who, as part of the job description, represents the City of Chicago in selling its bonds to the public An individual who represents a corporation traded on the New York Stock Exchange in selling securities to the public An individual who is employed by the Federal Reserve Board to sell Treasury Bills to retail investors
1, 3 Under the USA, an agent is defined as an individual who represents a broker-dealer selling any type of security, whether that security is exempt or nonexempt. Individuals who represent issuers in trading exempt securities or exempt transactions are not defined as agents. An individual who represents an issuer selling nonexempt securities is an agent and must be registered.
Which of the following statements regarding agent registration under the Uniform Securities Act are TRUE? In the absence of any action by the Administrator, the effective date of a registration is noon of the 30th day. The Administrator may initiate a disciplinary action within 2 years of an agent's withdrawal of registration. The administrator may request the agent furnish a statement of assets and liabilities. If, before the effective date of the registration, the Administrator requires amendments to the application, the registration will be considered to have first been filed upon filing of those amendments.
1, 4 Normally, registration of persons becomes effective at noon of the 30th day following filing. If the Administrator requires the filing of amendments, the clock starts over again with the filing of those amendments. Agents do not have financial requirements, and the Administrator has a maximum of 1 year after termination to initiate any actions.
If XYZ is a registered broker-dealer with its lone office located in State T, under which of the following circumstances must it also register in State L? XYZ's only dealings in State L are directly with issuers of securities in State L. XYZ engages in extensive transactions with the largest insurance company in State L. XYZ routinely sells nonexempt securities to extremely high net-worth residents of State L. XYZ purchases exempt securities from extremely high net-worth residents of State L for resale to residents of State T.
3, 4 Under the Uniform Securities Act, broker-dealers must register in any state where they engage in securities transactions with individual investors. The net worth of the individual is irrelevant. Broker-dealers with no offices in the state who engage in transactions in the state with certain institutional investors, such as insurance companies or investment companies, need not register in that state. Transactions between the issuer and a broker-dealer are exempt transactions.
Broker-dealers, investment advisers, and agents must renew their licenses with the state Administrator: A)every December 31, unless otherwise specified by state law B)annually upon the date of original registration C)licenses are permanent unless revoked, suspended, or canceled D)semiannually
A
In general, a broker-dealer is required to register with the SEC. An exception to that requirement would apply to a broker-dealer who A)maintains a place of business in a single state, only deals with residents of that states, and does not execute transactions in securities traded on a national exchange. B)is registered with the Administrator of the states in which it does business and only deals with issuers of the securities it trades. C)does not have a place of business in the state and limits its clientele to institutional clients. D)is currently registered with the SEC as an investment adviser.
A
The Uniform Securities Act would NOT consider who of the following to be securities professionals? A)Individual investors actively trading their own accounts B)Persons in the business of advising others regarding securities investments C)Persons in the business of buying or selling securities on behalf of others D)Persons in the business of buying or selling securities for their own account
A
Under the Uniform Securities Act, the term broker-dealer would include A)a person with no office in the state who directs offers to no more than 5 individual residents of the state in any 12-month period B)an agent registered under the act who from time to time sells stock from personal inventory C)an issuer distributing its own common stock offering D)a trust company
A
When an agent transfers employment from a broker-dealer registered with the SEC to a broker-dealer registered solely in this state A)the agent, the former broker-dealer, and the current broker-dealer must all notify the Administrator B)only the agent must notify the Administrator promptly C)only the agent and the SEC-registered broker-dealer must notify the Administrator promptly D)only the agent and the state-registered broker-dealer must notify the Administrator
A
Under the Uniform Securities Act, which of the following is a broker-dealer? A)A corporation that sells interests in an oil and gas limited partnership to investors with the proceeds going to the issuer B)An agent C)A credit union that sells its own stock D)An issuer
A A broker-dealer is any person that buys or sells for the accounts of others or for his own account. In this case, an entity structured as a corporation is selling , on behalf of the issuer, a security in the form of limited partnership units and is therefore a broker-dealer. A broker-dealer is not an issuer or an agent.
A broker-dealer having no place of business in a state is not required to be registered in that state if the broker-dealer A)does no business in that state other than with institutional clients B)is licensed/registered in its state of residence C)is a member of the New York Stock Exchange D)is a member of FINRA
A A broker-dealer must be registered in every state where it sells or offers to sell securities, unless an exemption is available. If a broker-dealer has no office in a particular state and no business is done in that state other than with institutional clients, registration there is not required.
Which of the following must register as an agent under the Uniform Securities Act? A)A sales assistant who takes orders on behalf of agents in a branch office B)An administrative assistant who provides securities quotes to clients C)A broker-dealer with offices in the state D)An individual who sells securities of an issuer to the issuer's employees without earning a commission
A A sales assistant who takes orders on behalf of agents in a branch office is required to register under the Uniform Securities Act. An administrative assistant who provides securities quotes to clients is not functioning as an agent and need not register. An individual who sells securities of an issuer to the issuer's employees without earning a commission need not register under the terms of the USA. Remember, a broker-dealer is excluded from the definition of an agent under the USA.
A sales assistant employed by a full service broker-dealer would be required to register as an agent when accepting orders for A)direct participation programs. B)gold coins. C)fixed annuities. D)commodity futures contracts.
A An individual employed by a broker-dealer who is involved in the sale of securities must register as an agent. The security here is the DPP.
Under Section 401 of the Uniform Securities act, the term agent does not include an individual who represents an issuer in effecting transactions in a security A)issued by and representing an interest in or a debt of, or guaranteed by, any bank organized under the laws of the United States, or any bank, savings institution, or trust company organized and supervised under the laws of any state B)issued by any person organized and operated not for private profit but exclusively for religious, educational, benevolent, charitable, fraternal, social, athletic, or reformatory purposes, or as a chamber of commerce or trade or professional association C)issued by and representing an interest in or a debt of, or guaranteed by, any federal savings and loan association, or any building and loan or similar association organized under the laws of any state and authorized to do business in this state D)issued or guaranteed by any federal credit union or any credit union, industrial loan association, or similar association organized and supervised under the laws of this state
A An individual representing an issuer in the sale of that issuer's security is not defined as an agent if the security is: issued by and representing an interest in or a debt of, or guaranteed by, any bank organized under the laws of the United States, or any bank, savings institution, or trust company organized and supervised under the laws of any state; issued or guaranteed by the United States, any state, any political subdivision of a state, or any agency of the foregoing; any security issued or guaranteed by Canada, any Canadian province, any political subdivision of any such province, any agency of the foregoing, or any other foreign government with which the United States currently maintains diplomatic relations, if the security is recognized as a valid obligation by the issuer or guarantor; a promissory note, draft, bill of exchange or bankers' acceptance that evidences an obligation to pay cash within 9 months after the date of issuance, is issued in denominations of at least $50,000, and receives a rating in one of the 3 highest rating categories from a nationally recognized statistical rating organization; or any investment contract issued in connection with an employees' stock purchase, savings, pension, profit-sharing, or similar benefit plan if the Administrator is notified in writing 30 days before the inception of the plan. It is not just any exempt security that qualifies the individual for the exemption—only the five listed above. A confusing point is that the individual is not an agent when the sales are made in any exemption transaction with no exceptions.
A Canadian broker-dealer is registered in Province Q. The firm has clients who vacation in several New England states and they would like to continue to do business with them while on their holidays. Under the Uniform Securities Act, A)this is permissible if the broker-dealer is properly registered in Province Q, deals only with existing clients, and registers in each of the states where their clients are vacationing B)the broker-dealer may only accept unsolicited orders from their existing clients while they are vacationing in the United States C)this is permissible only if the broker-dealer is registered with the SEC D)this would only be permitted if the trades were executed through an affiliated domestic broker-dealer who is licensed in those states
A Canadian broker-dealers and their agents must be registered in any state in which they wish to do business with exisiting clients who are temporarily in the state. The Uniform Securities Act provides for a form of limited registration for Canadian broker-dealers wishing to do business with their clients who are vacationing or otherwise traveling through the United States. In order to qualify for the limited registration, the BD must be properly licensed in its home province and their only dealing in the states is with an existing client.
A federally chartered credit union is domiciled in Texas. The credit union is making an offering of securities in Nebraska. To comply with the Uniform Securities Act's exclusion from the definition of agent, any individual offering the security in Nebraska A)could not sell without being an agent B)would have to be an employee of a broker-dealer registered in Texas C)would have to receive only nominal commissions D)would have to be an employee of a broker-dealer registered in Nebraska
A It is unusual to have an answer set up this way, but it does happen sometimes on the exam—"to comply with"—and then there is no way to comply. First of all, the USA's exclusions from the definition of agent only apply to individuals working for the issuer, never broker-dealers. Then, the exclusion only applies when selling the following exempt securities in nonexempt transactions: U.S. government and municipal securities; Securities of governments with which the United States has diplomatic relationships; Securities of U.S. commercial banks and savings institutions or trust companies (when not engaged in securities-related broker-dealer activities); Commercial paper rated in the top three categories by the major rating agencies with denominations of $50,000 or more with maturities of nine months or less; and Investment contracts issued in connection with employee's stock purchase, savings, pensions, or profit-sharing plans. Selling other exempt securities, such as those issued by a federally chartered credit union, on behalf of the issuer, requires one to become registered as an agent of the issuer. Don't confuse this with the exemption offered in the case of exempt transactions. In that case, regardless of whether the security is exempt or not, if an individual's only sales activity while representing an issuer is in exempt transactions, then the exclusion from the definition of an agent applies. It is obviously a much broader exemption than when selling exempt securities.
An agent of a broker-dealer registered in Illinois terminates his employment to accept a new position with a broker-dealer who is also registered in Illinois. If his previous employer fails to notify the state Administrator of the termination, the agent must A)notify the Administrator in Illinois of his termination B)notify his new employer that he has terminated his registration C)not seek employment with another broker-dealer until his registration is renewed D)notify the Administrator only if he learns that his previous employer has failed to notify the Illinois securities Administrator
A When an agent begins or terminates a connection with a broker-dealer, the agent as well as the broker-dealer must promptly notify the Administrator. The agent has no responsibility to insure that the previous employer has notified the Administrator.
Under the USA, each of the following is specifically excluded from the definition of a broker-dealer EXCEPT an A)agent B)investment adviser C)international bank D)issuer
B
When a broker-dealer registers with the state Administrator, which of the following persons are automatically registered as agents of the broker-dealer in the state? A)Agents registered in another state who are employed by the broker-dealer B)Any agent who is a partner, officer, or director, or a person occupying a similar status or performing similar functions C)Persons employed by the broker-dealer who are residents of the state but employed in a state other than that of the Administrator D)Those persons employed at the broker-dealer prior to its registration in the state
B
An individual has been employed by a broker-dealer to solicit new subscriptions for the firm's free monthly stock market report. The individual is paid a salary plus bonus based on his success rate with signing up subscribers. Under the USA, this person would A)have to be registered as an agent of the broker-dealer B)not have to be registered as an agent of the broker-dealer C)only be allowed to contact existing clients of the broker-dealer D)have to be registered as an investment adviser representative
B Agents of broker-dealers are in the business of securities-related transactions on behalf of clients of the firm. A free-market report is not a security, so this individual is not soliciting securities business.
All of the following statements regarding broker-dealers are true except A)they are regulated by the SEC as well as individual stock exchanges B)they employ only registered investment adviser representatives C)they act in an agency capacity when executing orders to buy and sell securities on the various stock exchanges in the secondary market D)they may act as dealers who buy and sell securities for their own account
B Agents work for broker-dealers, while investment adviser representatives work for investment advisers. The term broker-dealer is used because they sometimes act in an agency capacity (brokers) and other times in a principal capacity (dealers).
Under federal law, an application for becoming an associated person of a broker-dealer would be denied for an individual A)who is not a citizen of the United States B)pleading no contest to a misdemeanor involving a financial matter 65 months ago C)accused of a securities-related felony 110 months ago D)convicted of a felony 122 months ago
B An individual who is convicted of, or has pleaded guilty or no contest to, any felony or certain misdemeanors in the previous 10 years (120 months) is subject to statutory disqualification. Therefore, the misdemeanor involving a financial matter within the past 10 years is a cause for disqualification. A conviction made more than 10 years ago is part of the record but not cause for disqualification. One is presumed innocent until proven guilty so merely being accused is not the same as being convicted. There is no requirement that a registrant be a U.S. citizen.
Angelo lives and votes in State W. He winters in State C, splitting his time 60/40 between the 2 states. Angelo has a brokerage account with Sunset Investment Securities (SIS) and trades with an agent housed in SIS's State W office. SIS is also registered in States M and I but, having no place of business there, is not registered in State C. In order for Angelo's agent to handle the account, registration as an agent is required A)in State W and State C. B)in State W. C)solely with FINRA. D)in State C.
B By not having a place of business in State C and only having a client who is temporarily in the state, SIS (and those functioning as its agents) qualify for the "snowbird" exemption.
Under the USA, which of the following statements regarding the posting of surety bonds is NOT true? A)The Administrator requires the posting of bonds primarily to cover the cost of civil liabilities associated with violations of the Uniform Securities Act. B)The Administrator requires all broker-dealers to post bonds even if they maintain net capital in excess of minimum amounts. C)The Administrator can accept securities instead of cash if the posting of a bond is required. D)Bonds may be required for agents of broker-dealers.
B Firms that maintain net capital in excess of minimum requirements may be exempted from the requirement of posting surety bonds. Agents exercising discretion over client accounts may be required to post a surety bond.
Which of the following must register as a broker-dealer under the USA? A)A broker-dealer with no place of business in the state that has directed offers to clients who have more than 30 days' temporary residency in the state B)A broker-dealer with a place of business in the state that effects transactions exclusively with broker-dealers registered in other states C)A broker-dealer with no place of business in the state that deals exclusively with broker-dealers with offices in that state D)A broker-dealer with no place of business in the state that effects transactions exclusively with issuers of securities in that state
B If a broker-dealer has an office in the state, it must register with the state, regardless of what types of clientele it serves. The term "broker-dealer" excludes anyone without a place of business in the state who effects transactions exclusively with issuers, other broker-dealers, or institutions, or who directs an offer in the state to an existing customer who temporarily resides in the state where the offer is received, regardless of the length of time. As long as the broker-dealer is properly registered in the vacationer's state of permanent residence and does not maintain an office in the state being visited, it is not defined as a broker-dealer.
Which of the following people would not meet the definition of a person associated with an investment adviser? A)A brokerage firm that is considered to be the parent of a registered investment adviser B)The typist responsible for operating the desktop publishing system that prepares the investment adviser's weekly research bulletins C)A vice president of a registered investment adviser D)An individual who solicits potential clients to open advisory accounts
B People in strictly clerical or administrative positions are not considered to be associated persons of an investment adviser. Expect to see several variations of this theme on the exam.
Under the USA, the Administrator may do all of the following EXCEPT A)take jurisdiction over any person who sells or offers to sell either when the offer is made in the state or when an offer to buy is made and accepted in the state B)mandate the method used to maintain and file records C)prescribe form and content of financial statements required under the act D)conduct hearings in public, unless at the Administrator's discretion and with agreement of all parties, the Administrator decides otherwise
B The Uniform Securities Act does not grant the Administrator the power to make any specific bookkeeping method mandatory. The only requirement is that the books and records must accurately reflect the nature of the firm's business.
A person who has no place of business in this state would not be considered a broker-dealer if he effects transactions in this state exclusively with all of the following except A)the issuers of the securities involved in the transaction. B)investment advisers. C)insurance companies. D)other broker-dealers.
B The Uniform Securities Act excludes from the definition of broker-dealer, a person who has no place of business in this state if he effects transactions in this state exclusively with or through the issuers of the securities involved in the transactions, other broker-dealers, or banks, savings institutions, trust companies, insurance companies, investment companies as defined in the Investment Company Act of 1940, pension or profit-sharing trusts, or other financial institutions or institutional buyers. Please note that investment advisers are not included in this list. What is confusing is that the USA offers almost the exact same exclusion for investment advisers and that list includes other investment advisers as well as broker-dealers.
Which of the following statements is TRUE? A)The Uniform Securities Act is national law that each state enforces through a state Administrator. B)State Administrators are permitted to establish regulations relating to the registration, testing and fees for broker-dealers, agents, investment advisers and investment adviser representatives. C)The state Administrator has authority to amend federal law to meet the needs or special circumstance in his state. D)The USA only provides for civil liabilities for persons involved in illegal securities transactions in their state, while federal law provides criminal penalties.
B The state Administrators are permitted to establish the requirements for broker-dealer, agent, investment adviser and investment adviser representative registrations, including testing, filing, and fee regulations. The Uniform Securities Act is model legislation for state regulation (not federal regulation) that each state may adapt to its own needs. The state Administrator does not have authority to amend federal law to meet special circumstance in his state. Each state can model its legislation on the Uniform Securities Act, but a state cannot change federal law and must abide by federal securities legislation. The USA provides for both civil and criminal penalties for persons involved in illegal securities transactions in their state.
The Affray Compassionate Finance Company (ACFC) is offering $100 million of 150-day commercial paper for sale in State L. The paper is available in minimum denominations of $100,000 and has been rated AA by a leading rating organization. Who of the following would be required to register as an agent in State L in order to legally sell this security in the state? A)Because this security is exempt from registration, offers and sales can be made without registration as an agent. B)An agent of a broker-dealer registered in the state. C)An employee of the Affray Compassionate Finance Company who receives a 1% commission on sales. D)An investment adviser who recommends this security to clients.
B Those individuals who represent broker-dealers registered in the state must register as agents in that state if they wish to sell securities to that state's residents. It makes no difference what kind of security it is or to whom the security is being sold. Yes, this is an exempt security (less than 270 days' maturity; minimum $50,000 denomination; rating in the top 3 grades), but that only means that the security does not have to register. An exclusion from the definition of agent is given to those who represent issuers of certain exempt securities. Commercial paper is one of the 5 cases where this exclusion applies so ACFC's employee would not be defined as an agent. This is true even though compensation is being received. Investment advisers don't register as agents if all they do is give investment advice.
It has been a great year at Capital Funding, Inc., an SEC-registered broker-dealer that is also registered in 22 states. The company decides to share its good fortune with employees by paying a year-end bonus equal to 31% of annual salary. In order for clerical personnel to receive this bonus, A)they must be licensed as agents B)they must be employees of the broker-dealer C)they must be licensed as investment adviser representatives D)the bonus must be sales related
B Unregistered personnel may be paid a bonus as long as it is not directly related to any specific sales activity.
An agent registered in one state may solicit business in another state, provided A)the agent's firm is properly registered in the other state B)the agent was previously registered with a different firm in the other state C)both the agent and the employing broker-dealer are properly registered in the other state D)the agent applies for registration in the other state
C
An individual has been registered in State C and State D as an agent of a broker-dealer for the past three years. Due to a number of this agent's clients moving to State F, the agent registers there in early November. The individual's new registration in State F will expire A)on every anniversary date of the initial registration. B)on December 31 of the following year. C)on December 31 of the same year. D)automatically within 30 days after the withdrawal of registration if the state securities Administrator has initiated proceedings against the registrant.
C
An individual may NOT act as an agent for more than one broker-dealer A)unless the broker-dealers are exchange members B)unless the broker-dealers are unrelated C)unless the Administrator, by rule or order, authorizes such employment D)under any circumstances
C
How quickly must a broker-dealer notify the Administrator if material information relating to that broker-dealer's registration should change? A)Within 24 hours B)Within days C)Promptly D)No later than the time of license renewal
C
Sarah has passed her Series 6 qualification exam but not the Series 63. As Jack's assistant, Sarah has frequent telephone contact with Jack's customers to whom she provides account information and current stock quotes. In this situation, Sarah is A)in violation of the Uniform Securities Act B)in violation of the Securities Exchange Act of 1934 C)not in violation of any applicable statutes D)in violation of the Securities Act of 1933
C
The First Fidelity Building 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 A)would have to be employed by a broker-dealer registered in this state B)would have to be employed by a broker-dealer registered in the other state C)could not sell without being an agent D)would have to be employed by First Fidelity
C
Under the Securities Exchange Act of 1934, the term associated person would include each of the following EXCEPT a person who is associated with a broker-dealer A)as a branch office manager B)as an agent C)and whose functions are solely ministerial D)in the capacity of a partner solely by virtue of a contribution of capital
C
Under the Uniform Securities Act, the definition of a broker-dealer includes A)a trust company when executing transactions in accounts in which it does not act in a fiduciary capacity B)an authorized representative of the issuer who receives a commission C)a person in the business of making trades in his own account or for the accounts of others D)an agent handling principal transactions with major institutional clients
C
Under what conditions may an unregistered employee of a broker-dealer receive bonuses or incentives? A)Only when the employee's contract calls for being compensated in such a manner B)Under no circumstances if the employee is not registered C)When such bonuses or incentives are not tied to transactions, commission activity, or referrals generated by the unregistered person D)When such bonuses or incentives are tied to transactions, commission activity, or referrals generated by the unregistered person
C
Which of the following is considered an associated person of a broker-dealer? A)A secretary who assists brokers with clerical tasks B)A clerical person who is not authorized to accept or execute orders for clients C)A broker-dealer's officer who represents the broker-dealer in effecting or attempting to effect the purchase or sale of securities D)A secretary to a general partner of a broker-dealer
C
Which of the following must register as an agent when representing a broker-dealer? A)A partner of a broker-dealer who has no securities sales functions B)An individual who represents an underwriter only in transactions between an issuer and the underwriter C)An employee who accepts unsolicited orders from institutional clients D)The telephone switchboard operator who directs orders to the appropriate extension
C An employee of a broker-dealer who accepts orders must register as an agent. The fact that it is unsolicited and/or from an institution (making them exempt transactions) has no bearing on the requirement for the individual to register as an agent. A partner of a broker-dealer with no securities sales functions and an individual who represents an underwriter only in transactions between an issuer and the underwriter need not register. Individuals whose function is strictly clerical do not register as agents.
Under the Securities Exchange Act of 1934, which of the following would NOT be grounds for disqualification of a broker-dealer's registration? A)Conviction of misappropriation of client funds B)Violating a securities act C)Being sued by a client D)Prohibition by court order from practicing as an investment adviser
C Being sued by a client is not grounds for disqualification. Items that would disqualify a registration include being currently under suspension, revocation, or injunction by any court, regulatory authority or SRO, domestic or foreign; currently employing a person statutorily disqualified; having been convicted in the past 10 years of a felony or a securities or financially related crime; or falsifying an application for registration.
The Uniform Securities Act requires all of the following to be registered as agents of a broker-dealer EXCEPT A)a senior partner of a broker-dealer who actively manages the firm's day-to-day operations B)an associated person of a broker-dealer whose primary function is to take orders from the public C)a silent partner who has contributed most of the capital of the broker-dealer but takes no part in the firm's activities D)an employee of a broker-dealer who only trades securities for the firm's proprietary account
C Employees who take orders from the public and who trade securities for the accounts of broker-dealers must register as agents. The USA requires any person who represents a broker-dealer in effecting securities transactions to register as an agent of their employing broker-dealer. Partners (officers, directors) who play an active role in the securities business of a broker-dealer must register as agents; those who don't are exempt from registration.
Which of the following is not included in the definition of broker-dealer as found in the Uniform Securities Act? A)Attorneys B)Credit unions C)Banks D)Investment advisers
C In the Uniform Securities Act, it specifically states: "Broker-dealer" means any person engaged in the business of effecting transactions in securities for the account of others or for his own account. "Broker-dealer" does not include (1) an agent, (2) an issuer, (3) a bank, savings institution, or trust company. Attorneys are excluded from the definition of investment adviser, as long as their advice is incidental to their legal practice, but that exclusion does not apply to the term "broker-dealer". Even though credit unions engage in banking activity, they are not included in the exclusion. Being an investment adviser does not exclude a person from the need to register as a broker-dealer if that person is performing the functions of a BD.
Dr. David Livingstone is registered as an agent in States H and M with Stanley Securities, a broker-dealer registered in every state. Livingstone would now like to register in State W. In order to do so, all of the following would be required except A)filing a consent to service of process with State W. B)filing an application for registration with State W. C)passing State W's qualification exam. D)paying the appropriate fee to State W.
C Many years ago, applicants for registration as an agent in a state had to pass that state's exam. Now, because the NASAA exams are uniform exams, they are accepted in every state that requires passage of an exam. A consent to service must be filed with every state in which the person intends to register and, of course, the application must be accompanied by the proper fee.
GEMCO Securities, a registered broker-dealer, has a policy of hiring unpaid interns from top business schools. GEMCO is currently the lead underwriter on a new issue and has assigned three of its interns to specific tasks. One is doing entering the data as indications of interest are received, the second is calling clients to offer to deliver their prospectus via email instead of mail, and the third is calling clients to describe the new issue and accept indications of interest. Which of the interns would need to register as agents? A)Because they are not being compensated, none of the interns need to register. B)All of the interns would need to register. C)Only the third intern would have to register. D)The second and third interns would be required to register.
C When an individual representing a broker-dealer contacts clients to obtain indications of interest for a new securities offering, that person is performing a function requiring registration as an agent. Employees of a broker-dealer, permanent or temporary, compensated or not, do not have to register if their only function is clerical or administrative. Compiling data is clerical and following up with clients to determine how they wish to receive documents for a purchase they've already made is simply an administrative task.
As defined in the Uniform Securities Act, which of the following statements is TRUE regarding an agent? A)An agent may be an individual or a firm. B)If someone meets the definition of an agent, that person is exempt from registration requirements. C)An agent may be a broker-dealer. D)An agent represents a broker-dealer or an issuer in effecting or attempting to effect purchases or sales of securities.
D
Broker-dealers and investment advisers must keep all of the following records EXCEPT A)memoranda B)account books C)electronic correspondence D)records of incoming and outgoing telephone calls
D
If an agent located in the Ogden, Utah, office of a broker-dealer wishes to solicit prospects residing in California, under the Uniform Securities Act, the agent would A)be allowed to solicit if the securities are exempt B)not have to register in California C)not have to register if the broker-dealer is registered in California D)have to register in California
D
The Uniform Securities Act authorizes the Administrator to make certain demands of broker-dealers. In general, the Administrator would not require a broker-dealer to A)publish an announcement of the application for registration in a newspaper published in the state B)promptly file a correcting amendment to any document on file with the Administrator which becomes inaccurate or incomplete in any material respect C)file various financial reports D)post a surety bond if the broker-dealer does not have investment discretion over client accounts or does not maintain custody of customer funds and/or securities
D
Under the Uniform Securities Act, which of the following is an agent? A)A clerical person who files trade confirmations for the firm B)An individual who is in the business of providing investment advice on behalf of his employer C)A broker-dealer that charges a commission as a regular part of its business D)An individual who effects securities transactions for commissions
D
Which of the following meets the USA's definition of a broker-dealer? A)A savings and loan association B)A bank C)A trust company D)A person who effects transactions for the accounts of others
D
Which of the following persons is defined as an agent by the Uniform Securities Act? A)President of the state university who sits on the broker-dealer's board of directors B)Secretary of a branch office sales manager C)Silent partner of a broker-dealer D)Clerk at a broker-dealer who is authorized to take orders
D
While an application for registration as an agent of a broker-dealer is still pending, that person would be permitted to A)engage in no activity at the office other than studying for the exam B)limit her acceptance of orders to those from the broker-dealer's existing clients C)accept unsolicited orders only D)assist registered employees of the firm by doing research on securities they are following
D
Which of the following must register as an agent? A)An individual who is paid a commission to sell certificates of deposit for ABC National Bank B)An individual who sells commercial paper for ABC National Bank C)An employee of the Fed whose job is selling Treasury bonds to the public D)An individual representing a broker-dealer who sells commercial paper
D An individual who represents a broker-dealer selling commercial paper must register under the USA. Though the securities (commercial paper) are exempt, the representative must be registered as an agent of the broker-dealer. The only exceptions from the definition of "agent" apply to those who sell on behalf of issuers either of exempt securities or in exempt transactions. The commercial paper and Treasury bonds are exempt securities, and the bank CDs here referred to are not of the negotiable, jumbo variety sold in the money market and are not securities, so no registration is required.
An individual has been hired by a person to assist in the selling of securities it is issuing to residents of State A. The individual would be defined as an agent under the Uniform Securities Act if the issuer is A)a trust company organized and supervised under the laws of State B. B)issuing commercial paper in minimum denominations of $100,000 with an AA rating and a 6month maturity. C)the city of Saskatoon, Saskatchewan (Canada). D)a credit union organized and supervised under the laws of State A.
D Please remember the broad definition of person - it does not mean an individual unless preceded by the word, natural. When an individual represents the issuer of certain exempt securities in the sale of those securities to the public, that individual is not included in the USA's definition of agent. Credit unions are not in that list so those individuals are agents and must be registered as such. Individuals representing banks, including savings institutions and trust companies when organized and supervised under the laws of any state (not necessarily the state in which the securities will be sold), are not agents. If the agent represents the issuer of commercial paper meeting the exemption requirements of the USA ($50,000 minimum denomination, top 3 grades, and maximum 9-month maturity), that individual is not an agent. Finally, representing the United States or Canadian federal government, or any of their political subdivisions, excludes one from the definition of agent.
With regard to the state registration requirements of agents of registered broker-dealers, all of the following statements are correct except A)registration is required when they limit their activity to the sale of exempt securities B)registration is required if they solicit the sale of securities by telephone to fewer than 6 individuals residing in that state C)registration is not required in a state where the agent has no place of business and only deals with existing clients who are vacationing in that state D)registration is required in each state in which the employing broker-dealer has a place of business
D The fact that the broker-dealer does business in a state has nothing to do with a specific agent. Many broker-dealers are registered in all states; very few agents are. Agents must register in each state where they are selling or offering securities, even if the security or the transaction is exempt. That exemption only applies to the need for the security to be registered, not the agent. Soliciting the sale of securities by telephone is considered making an offer, and there is no de minimis exemption available. Finally, registration is not required when making use of the "snowbird" exemption.
An agent with a broker-dealer is suddenly called out of town on a personal family matter. While away, the agent's unregistered sales assistant receives a phone call from an existing client wishing to purchase 200 shares of a listed stock. What would be the most appropriate action for the sales assistant to take? A)Accept the order because it is from an existing customer B)Accept and place the order because it is unsolicited C)Explain that the agent is out of town and request the client to call back with the order next week D)Route the call to a licensed agent in the office
D The fact that the order is unsolicited does not preclude the rule that under no circumstances may an unregistered individual accept and place orders.
Seven years ago, Ivan was found guilty of embezzling securities from clients. He now wishes to join another brokerage firm. Which of the following statements is TRUE regarding this situation? A)He may be employed in a sales position, provided the firm agrees to be liable for any losses due to his misconduct. B)He may be employed by a brokerage firm, provided he is not involved directly in any dealings with clients. C)There are no provisions restricting his employment because the restriction time period has elapsed. D)He cannot be employed because he is still subject to statutory disqualification provisions.
D Under the Securities Exchange Act of 1934, there are a number of items that disqualify a person from becoming a member of, or from associating with, a member of a self-regulatory organization (SRO). The items include being currently under suspension, revocation, or injunction by any court, regulatory authority, or SRO (foreign or domestic); currently employing a person statutorily disqualified; having been convicted in the past 10 years of a felony or a securities- or financially related crime; or falsifying an application for registration. Ivan cannot be employed by a brokerage firm, because he was convicted 7 years ago. Because the Securities Exchange Act of 1934 requires a broker-dealer to join one or more SROs, being statutorily disqualified eliminates the possibility of employment.
A publicly traded corporation offers its employees 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 any orders for that stock. Under the USA, the employee A)need not register as an agent of the issuer under any circumstances B)may receive commissions without registration C)must register as an agent of the issuer D)must register as an agent only if he will receive commissions or remuneration, either directly or indirectly related to the volume of sales
D Under the USA, an individual is an agent when effecting transactions with an issuer's existing employees if commissions or other remuneration related to the sale are paid. Therefore, there are cases where the employee would have to register as an agent. When the individual is paid a straight salary for this work, no registration is required.
Mary, who is licensed as an agent in State A, got a promotion and will turn her clients over to Julie, who is licensed only in State B. Under the registration requirements of the Uniform Securities Act, before Julie can take over the accounts, she must A)receive permission from each of those clients B)register with the NYSE C)register with FINRA D)register with State A
D Unless an exemption applies (and there is nothing in the question that would indicate such), for an individual to sell securities in a particular state, she must be licensed in that state. This question is specifically about registration requirements, not whether client permission is needed. There is nothing in the USA that requires client consent when the agent of record on the account changes. Do not confuse this with the contract assignment rules applying to investment advisers.
Included in the Uniform Securities Act's definition of broker-dealer would be A)savings institutions. B)issuers of securities. C)individuals who are registered as agents. D)a broker-dealer with a place of business in the state whose only clients are insurance companies.
D When the firm has a place of business in the state, regardless of its clientele, it is a broker-dealer. Exclusions from the definition include agents, issuers, and most financial institutions, such as banks and savings institutions. Also excluded are broker-dealers with no place of business in the state who only deal with institutional clients, such as banks and insurance companies.
Prompt notification to the Administrator must be made when A)a federal covered adviser with a place of business in the state relocates that office to a different city B)a nonexempt issuer's dividend is reduced C)there is a change to the marital status of an agent D)there is a material change to any information contained in a broker-dealer's application for registration that is on file with the state
D Whenever there is a material change to the information contained in the registration application of a securities professional, the Administrator must be promptly notified. Marital status is not included on the Form U4. Federal covered investment advisers are not under the Administrator's jurisdiction.
