Series 63

Under the Uniform Securities Act, which of the following is, by definition, a broker-dealer in a state?

A broker-dealer without an office in the state whose sole clients are registered investment advisers

Steven is registered as an agent with Maple Leaf Securities, a Canadian broker-dealer located in Toronto with no offices in the United States. One of Steven's clients recently made a permanent move to Florida. Which of the following statements with respect to Steven is correct?

As long as the only dealings with this client are with a previously established Canadian tax qualified retirement plan, Steven only has to file an application and a consent to service of process.

Which of the following is exempt from state registration under the Uniform Securities Act?

Common stock of the First National Bank of Boston, a major American commercial bank with branches and representative offices in the United States and abroad

Securities of which of the following issuers are exempt under the Uniform Securities Act?

National banks, state banks, and federal savings and loan associations

According to the Uniform Securities Act, a person must register as a broker-dealer in a state if he had which of the following?

No place of business in the state, but clients who relocated their official residence to that state more than 30 days ago A place of business in the state

Which of the following statements regarding state registration of securities is true?

Registration by coordination is effective concurrently with federal registration.

Which of these would be the most appropriate action for an agent who hears a sensational rumor about a stock to take?

Report the rumor to the proper supervisory person.

A broker-dealer is registered in all 50 states. Which of the following statements is correct regarding the firm's obligations for maintaining books and records?

THe BD need only satisfy the requirements of the SEC

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?

Yes. No registration necessary

Keely Company, Inc., has outstanding equity securities registered with the SEC. The company issues a debt security directly to financial institutions. This sale is an example of

an exempt transaction

Under the Uniform Securities Act, the least active review of registration documentation is performed by state Administrators before which of the following becomes effective?

coordination and notice filing

Under the Uniform Securities Act, which of the following is a broker-dealer?

corporation that sells interests in an oil and gas partnership to investors with the proceeds going to the issuer

Gamma Delta LLC (GDL) is a broker-dealer registered with the Administrator. The nature of Gamma Delta's business is such that the Administrator requires a $30,000 surety bond. In lieu of the bond, GDL could

deposit $30,000 cash

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 all of the following records except

emails containing unsolicited testimonials

As a general matter, the regulators do not treat posts by customers or other third parties as the firm's communication with the public. Under certain circumstances, however, third-party posts may become attributable to the firm. Whether third-party content is attributable to a firm depends on whether the firm has (1) involved itself in the preparation of the content or (2) explicitly or implicitly endorsed or approved the content. Where the firm has involved itself in the preparation of the content, it is known as

entanglement

A licensed agent believes that interest rates are about to fall and contacts all of her clients and suggests they purchase high-quality debt securities with long-term maturities. This action

has probably violated the uniform security act's suitability standards

Jamal is registered as an agent with Dearborn Distinctive Investments (DDI), a broker-dealer registered with the SEC and a number of states. Due to some poor management mishaps, the SEC revokes DDI's registration as a broker-dealer. How does this affect Jamal's registration as an agent?

his registration is no longer active

One way to make money is to buy low and sell high. If an investment adviser has developed a proprietary charting system that has had a very high degree of success in picking stocks near their market bottoms, any advertisement about the system must

indicate that there are limitations and difficulties to using the system.

Under the Uniform Securities Act, the registration requirements for agents would never include

minimal capital

An agent may borrow securities from a customer

only if the client is in the business of lending sercurities

A broker-dealer receives a written complaint from one of its customers. The most appropriate action to take is to immediately

reply to the client in writing

Some registered investment advisers are federal covered, while others register on a state-by-state basis. In the case of a state-registered investment adviser having its only office in State O with no offices in any other state, the authority of the office of the Administrator would include

requiring IARs to pass a qualification exam

An issuer employs its officers and directors to sell newly issued shares of the company to the public. To comply with the Uniform Securities Act, the officers and directors would have to be registered as agents of

the issuer

In general, the Uniform Securities Act requires broker-dealers to keep most records for

three years with the first two in an easily accessible location.

The term used to describe a customer-initiated order that includes all of the details except time and price is

unsolicited

The NASAA Model Brochure Rule for investment advisers requires delivery of a brochure containing information about the adviser's background and business practices in all of the following situations except

when the client is an investment company. when the contract is for an impersonal advisory service requiring payment of less than $500.

Which of the following is the least suitable recommendation for an elderly widow who needs current income?

zero-coupon bond

Which of the following are not included in the definition of an agent in the Uniform Securities Act?

A licensed broker-dealer An officer of an issuer who only represents the issuer in selling shares to a broker-dealer underwriting the company's securities

The Uniform Securities Act would not require which of the following to be registered as an agent of a broker-dealer?

A partner who has contributed most of the capital of the firm but takes no part in its activities

Under the Uniform Securities Act, which of the following is not excluded from the definition of broker-dealer?

A person with an office in this state whose securities business is limited to effecting transactions with institutional investors

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

Which of the following transactions would constitute a violation of the Uniform Securities Act?

An individual, acting on behalf of an issuer, selling shares of an unregistered nonexempt security to fewer than 15 noninstitutional clients The sale of a Canadian government bond to the resident of a state in which the agent is not registered

For purposes of transactional exemptions, which of the following qualify under the Uniform Securities Act?

Executor of an estate Administrator of a trust

Which of the following are required to register with a state Administrator?

Investment adviser representatives of federal covered advisers who deal exclusively with insurance company clients and have a place of business in the state

Which of the following statements concerning the snowbird exemption is true?

It applies only when the broker-dealer does not maintain a place of business in the state in which the exemption is sought.

Which of the following types of compensation is an investment adviser prohibited from accepting?

Quarterly fee based on account performance

Under the Uniform Securities Act, which of the following is true regarding the registration of securities?

State registration by coordination is available only if a federal registration statement has been filed under the Securities Act of 1933 in connection with the same offering.

XYZ common stock is listed for trading on the NYSE. Under the Uniform Securities Act, which of the following XYZ securities (other than common shares) are exempt from state registration?

XYZ first mortgage bonds warrants to purchase XYZ common stock XYZ preferred stock

Under the Uniform Securities Act, which of the following persons has to register as an investment adviser?

a broker-dealer who gives advice for which he charges a specific fee

An individual has been hired by an issuer to assist in the selling of securities it is issuing to residents of State V. The individual would be defined as an agent under the Uniform Securities Act if the issuer is

a federal credit union

When discussing cybersecurity, the term covered account refers to

a personal or family account for which the firm must provide data protection

To transact business in a state as an investment adviser representative, a person must

be registered as a representative of an investment adviser and have passed the appropriate NASAA exam for IARs.

A client is interested in purchasing a thinly traded equity security where, due to the extra effort involved in obtaining the issue, the commission charged will be somewhat higher than normal. The compensation to the broker-dealer must be disclosed

before the order is placed and on the trade confirmation

A person registered in State C as an agent with Approved Retirement Investments (ARI), a registered broker-dealer, would be violating ethical standards

by stating that her registration means she has been approved by the Administrator to sell to residents of that state.

In response to an evolving marketplace, the SEC, through Release IA-1092, expanded the coverage of the definition of investment adviser to include

financial planners and pension consultants

Under the Uniform Securities Act, the Administrator has the power to do all of the following except

indict offenders

Under the Uniform Securities Act, those persons carrying out a broker-dealer's supervisory regimen over agents

must be registered as agents

A broker-dealer limits its business to effecting transactions in securities that are exempt from registration with the state. The individuals representing that broker-dealer

must register as agents.

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 Uniform Securities Act, the employee

must register as an agent only if he will receive commissions or remuneration, either directly or indirectly related to the volume of sales.

Under the Uniform Securities Act, a person representing the issuer is not considered an agent in any of the following transactions except

nonexempt, initial public offerings confined to a single state of registration

An employee of an issuer who sells the issuer's common stock exclusively to trust companies and savings institutions is

not required to register as an agent of the issuer

The term agent as defined in the Uniform Securities Act, would not include which of the following individuals?

one who represents an issuer in effecting exempt transactions

Clarice is registered as an agent in State X and represents a broker-dealer that is registered in all 50 states. A customer who is a resident of State Y calls the broker-dealer and is directed to Clarice. The customer wishes to place an order to purchase $10,000 of stock. Under the Uniform Securities Act, Clarice should

refer the order to an agent registered in State Y because she is not registered there.

A broker-dealer with no place of business in a state is not defined as a broker-dealer in that state when its only clients in that state are

registered investment companies

If the press carried an article about a broker-dealer found guilty of commingling by the SEC, it would likely be in reference to violating

the Customer Protection Rule.

It is common for a registered broker-dealer to maintain a website. Which of the following statements is true?

the original site design is kept for 3 years

To which of the following situations does the transaction exemption apply?

the sale of an estate's holding of OBM shares by an executor

Acme Manufacturing Company's latest stock offering is registered with both the SEC and the states. This would permit a registered agent to make the comment that

the security is legal for sale

Following the advice of its portfolio managers, The Rising Tide Hedge Fund executes most of its securities transactions through Momentum Securities, a registered full-service broker-dealer. In order to compensate for the commissions charged, Momentum Securities allows employees of Rising Tide to use furniture and facilities at a discounted rate. Under the soft dollar provisions of Section 28(e),

this would not fall under the safe harbor

The Uniform Securities Act excludes from the definition of agent individuals who represent certain issuers in the sale of their securities. An individual representing which of the following issuers does not qualify for that exclusion?

a federally chartered credit union

Under the Uniform Securities Act, the term broker-dealer would include

a person with no office in the state who sells variable life insurance policies to no more than five retail investors residing in the state during any 12-month period.

The Uniform Securities Act does not grant the Administrator the authority to commence an action against a broker-dealer registered in her state based upon

a shareholder, with no management role in the broker-dealer, being unable meet his financial obligations as they come due.

The only financial requirement that the Administrator may place upon a person applying for registration as an agent is

a surety bond if the agent will be exercising discretion over customer accounts.

Under NASAA's Model Rule on Unethical Business Practices of Investment Advisers, Investment Adviser Representatives, and Federal Covered Advisers, the contract between an investment adviser and its clients shall

be in writing

If an individual acting on behalf of an issuer engages in the sale of securities issued by a savings institution organized and supervised under the laws of any state, which of the following statements is true?

the individual is not required to be registered representing issuer - exempt securities (savings institution)

An individual would not be considered an agent under the Uniform Securities Act if she engaged in which of the following?

A transaction between an issuer and the underwriters Transactions between an issuer and savings institutions or trust companies

A broker-dealer purchased some corporate bonds for its inventory. Four months later, some of the bonds have appreciated by as much as 150%. When selling these bonds to customers, the broker-dealer realizes an enormous profit. This would be

acceptable because the profit was generated as a result of market appreciation.

Western Securities, Inc. (WSI) is a broker-dealer that also offers portfolio management. One of WSI's portfolio managers notices an article on asset allocation that harmonizes with WSI's investment philosophy. If WSI should post a link to this article on its website, it would probably be considered

adoption

The registration of a broker-dealer in this state would automatically register as an agent

an agent who sits on the BoD of the broker-dealer

An applicant for registration as an IAR in this state was convicted four years ago of a nonfinancially related crime in another state. Under that state's laws, the crime was a misdemeanor, but under this state's laws, it is a felony. When viewing this IAR's application, the Administrator will

treat the crime as a nonfinancial misdemeanor

Under the Uniform Securities Act, the term agent would include an individual who sells

Exempt securities on behalf of a broker-dealer in an exempt transaction. non-exempt securities on behalf of a broker-dealer in an exempt transaction

Registration as an investment adviser or investment adviser representative under the Uniform Securities Act is required of

an economics professor at a local community college who gives lectures in the evenings to public groups about portfolio analysis for which he charges a nominal fee.

A broker-dealer with no place of business in the state would not be required to register with the Administrator unless one of its clients was

an employee benefit plan with assets of less than $1 million.

In the Howey decision, the U.S. Supreme Court held that a security must represent

an investment of money in a common enterprise with the expectation of profit from the managerial efforts of others.

Under the NASAA Statement of Policy on Dishonest or Unethical Business Practices of Broker-Dealers and Agents, a broker-dealer may charge a reasonable fee for

appraisals, transfers, collection of dividends, safekeeping.

Under industry rules, customers who wish to trade options must receive a copy of the OCC's options disclosure document (ODD)

at or before account approval.