Series 63 missed questions
In response to an evolving marketplace, the SEC, through Release IA-1092, expanded the coverage of the definition of investment adviser to include A) broker-dealers offering wrap fee programs and financial planners B) broker-dealers offering wrap fee programs and life insurance agents C) life insurance agents and pension consultants D) financial planners and pension consultants
D
Under the Uniform Securities Act, an investment adviser would be exempt from registration in a state in which he has no place of business if he A) had no more than 5 retail clients in that state within the past 12 months B) had no more than 10 retail clients in that state within the past 12 months C) is registered as a broker-dealer D) had no more than 15 retail clients in that state within the past 12 months
A
A "margin account" is a type of brokerage account in which the broker-dealer lends the investor cash to purchase securities using marginable securities in the account as collateral. Which of the account documents authorizes the use of those securities as collateral for that loan? A) The loan consent agreement B) The secured agreement C) The credit agreement D) The hypothecation agreement
C
A federal covered investment adviser is a person A) registered, or excluded from the definition of investment adviser, under the Investment Advisers Act of 1940 B) registered with North American Securities Administrators Association (NASAA) C) registered under the Uniform Securities Act D) exempt from regulation under the Securities Exchange Act of 1934
A
A notice filing would be most appropriate for which of the following new issues? A) Open-end investment company shares B) Railroad equipment trust certificate C) Federal credit union stock D) Intrastate offering
A
Which of the following would be an agent under the terms of the Uniform Securities Act? I.) A sales representative of a licensed broker-dealer who sells secondary securities to the general public II) An assistant to the president of a broker-dealer who, for administrative purposes, accepts orders on behalf of senior partners III) A subsidiary of a major commercial bank registered as a broker-dealer that sells securities to the public IV) An issuer of nonexempt securities that are registered in the state and sold to the general public A) I and II B) II and IV C) I and IV D) II and III
A
An agent overhears a rumor and wishes to use that information to convince ALL of her clients to purchase a security. Under the Uniform Securities Act, the agent may A) recommend the security if the source of the rumor came from a reliable source B) recommend the security if it is an appropriate investment C) recommend the investment if the rumor is based on material inside information D) not recommend the security
D
A broker-dealer with no place of business in the state would not be required to register if their only clients were A) limited to a maximum of 5 individuals over any 12-month period B) banks and insurance companies C) persons acting in a fiduciary capacity D) accredited investors
B
A president of a bank sells shares of the bank to public investors. Under the Uniform Securities Act, he or she is A) underwriting the issue in the role of a broker-dealer B) not defined as an agent under the Uniform Securities Act C) an agent under the Uniform Securities Act D) an investment adviser
B
An individual walks into the office of a broker-dealer wishing to open a new account. Which of the following information would NOT be required on the new account form? A) Name of employer B) Marital status C) Citizenship D) Physical address
B
For larger accounts, a broker-dealer is least likely to waive its normal fee for A) the annual account maintenance charge B) wiring funds to the client's bank C) safekeeping of funds or securities in the account D) transferring the account to another broker-dealer
D
An agent engages in a practice prohibited under the NASAA Statement of Policy on Dishonest or Unethical Business Practices of Broker-Dealers and Agents by doing any of the following EXCEPT A) recording small transactions with clients on the books of the employing broker-dealer B) borrowing money from his father, who is a client, and making full disclosure to the employing broker-dealer C) not disclosing risks of a transaction to an unsophisticated client who would not understand the explanation D) sharing in profits and losses with clients and making full disclosure of this arrangement to the employing broker-dealer
A
Differences between static and interactive content on social media include I. Only static content can be reused by others II. Only static content needs pre-approval III. Only static content can be changed by the person who originated it IV. Only interactive content can be commented on by others A) II and IV B) II and III C) I and III D) I and IV
A
In order for a surety bond to meet the requirements of the Uniform Securities Act, it must provide that A) any customer who can prove a violation is entitled to collect against the bond B) the bond must remain in force no less than two years after the withdrawal of registration C) it is in the form of cash or marketable securities D) because bonds are transferable, any agent's bond may be used to meet the obligation of another agent
A
It would be considered fraud for an agent to intentionally: I. tell a client that a bond is yielding 10% when the actual yield is 1% II. tell a client that a subordinated debenture is a prior lien mortgage bond III. tell a client that you are so sure the client will not lose money that you have placed funds in escrow equal to the amount of the purchase to cover any possible loss IV. share commissions with another agent in your office without disclosing this fact to the client A) I, II, and III B) I, II, III, and IV C) II and III D) I and IV
A
The National Securities Markets Improvement Act of 1996 (NSMIA) A) defined the term "federal covered adviser" B) created a national market system C) created the concept of fraud, as used in the Uniform Securities Act D) overcame the restrictions of selling securities in interstate commerce
A
Which of the following are NOT investment advisers? I. A broker-dealer who charges for investment advice II. A publisher of a financial newspaper with regular and general circulation III. A person who sells security analysis IV. A CPA who, as an incidental part of his practice, suggests tax-sheltered investments to wealthier clients A) I and IV B) II and III C) II and IV D) I and III
C
An Administrator has specific authority under the USA to do all of the following EXCEPT A) require that the proceeds from an offering be held in escrow until issuer receives a certain percentage of the sale of the securities offered B) issue emergency injunctions to prevent a violation of the act C) enforce subpoenas in the state at request of an Administrator of another state for alleged violations that occurred in another state D) suspend the registration of a security if the suspension is in the public interest and the offering has excessive commissions
B
In a margin account, broker-dealers lend money to clients to enable them to leverage their investments. The account document that is evidence of the debtor-creditor relationship is A) the loan consent agreement B) the credit agreement C) the IOU agreement D) the hypothecation agreement
B
In general, a broker-dealer will disclose its fee schedule A) to its agents who are then responsible for sharing with client B) at the time of the account opening C) within 30 days following any changes in fees or charges D) when requested by the client
B
Trade confirmations sent by broker-dealers to their customers must always include A) the current market price of the security traded B) the amount of commission charged C) the tax identification number of the customer D) the amount of markup or markdown charged
B
Under the Dodd-Frank Act of 2010, which of the following is required to register as an investment adviser on the state level? A) An adviser who acts as a pension consultant to employee benefit plans with assets of $200 million or more B) An adviser who manages client accounts with less than $100 million in value C) An adviser to investment companies registered under the Investment Company Act of 1940 D) An adviser who manages client accounts in excess of $100 million in value
B
An investment adviser is registered in New Jersey and has offices in Georgia and Arkansas. One of their IARs lives in Georgia and in addition to his local clients, has one client who lives in Arkansas. The IAR would be required to register in A) Georgia, Arkansas and New Jersey B) Georgia and Arkansas C) Georgia D) Georgia and New Jersey
C
In order to function as a broker-dealer on the premises of a financial institution A) any networking arrangements between the bank and the broker-dealer must be clearly disclosed B) all agents must be employees of the bank C) the broker-dealer must clearly distinguish between the operations of the broker-dealer and the retail banking operation D) the bank must own the broker-deale
C
Under the National Securities Markets Improvement Act of 1996 (NSMIA), investment companies registered under the Investment Company Act of 1940 are required to register A) as exempt securities, at neither state nor federal levels B) as securities at both state and federal levels C) as securities at the federal level only D) as securities at the state level only
C
A broker-dealer receives a written complaint from one of its customers. The most appropriate action to take is to A) immediately suspend the agent involved until the complaint is resolved B) immediately notify NASAA C) immediately reply to the client in writing D) immediately notify the Administrator
C
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: I) before the order is placed II) at the time of trade execution III) in the prospectus IV) on the trade confirmation A) II and III B) I and III C) I and IV D) II and IV
C
According to the Uniform Securities Act's rules for an investment adviser with custody of customer assets, which of the following statements are TRUE? I) The Administrator must give written approval before the investment adviser may hold customer assets in custody. II) Customer assets must not be commingled with assets of the investment adviser. III) An investment adviser who has discretion over customer accounts is deemed to have custody. IV) Every 3 months, the investment adviser must send an itemized account statement to each customer whose assets are held in custody. A) I and II B) III and IV C) II and IV D) I and III
C
An AGENT offers to share in any losses or profits with clients. This is: A) Prohibited as investment adviser representatives are not allowed to share in client accounts B) permitted if the broker-dealer authorizes this activity. C) prohibited unless the client gives written authorization and approval is granted by the broker-dealer. D) permitted if the client has given verbal authorization to the client
C
When a broker-dealer acts in the capacity of a principal in a trade, the firm has acted A) for the benefit of the client B) as an agent C) as a contra-party to the trade D) in an unethical manner
C
Under all of the following circumstances, the USA requires investment advisers with no place of business in the state to register EXCEPT A) when an adviser with numerous retail clients in the state has not been subject to disciplinary action within any state within the last 10 years B) when an adviser has maintained assets of $100 million or more for 7 out of the last 10 years C) when an adviser only provides investment advice to 401(k) plans with assets of $250,000 or more D) when an adviser only provides advice to registered investment companies
D
Under the NASAA Statement of Policy on Dishonest or Unethical Business Practices of Broker-Dealers and Agents, all of the following are prohibited practices EXCEPT A) assuring a customer that he will not lose money by purchasing securities guaranteed by the U.S. government B) recommending an illiquid investment to someone who has no cash emergency fund C) borrowing securities from a customer's account with the prior approval of one's employing broker-dealer D) sharing in the profits and losses in a customer's account with consent of the customer and the employing broker-dealer
D
A consent to service of process allows the Administrator to A) ensure that the legal appeal process is expedited as a result of the Administrator's access to information B)terminate a registrant's application C)verify the accuracy and completeness of registration without obtaining the registrant's prior approval D)exercise the power of attorney on behalf of the registrant
D
An issuer employs its officers and directors to sell newly issued shares of the company to the public. To comply with the USA, the officers and directors would have to be registered as agents of A) neither a broker-dealer nor the issuer because the transactions are exempt B) the broker-dealer and the issuer C) the broker-dealer D) the issuer
D
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 partnership. B) An agent may be a broker-dealer. C) If someone meets the definition of an agent, that person is exempt from registration requirements. D) An agent represents a broker-dealer or an issuer in effecting or attempting to effect purchases or sales of securities.
D
Exemption from the registration requirements of the USA would be granted to all of the following EXCEPT a A) security issued by a credit union authorized to do business in the state B) bond issued by a Canadian province C) bond issued by the state of New Jersey D) corporate debenture
D
Under the Uniform Securities Act, the term broker-dealer would include A) a person with no office in the state who effects securities transactions with over 50 different banks domiciled in the state B) an issuer distributing its own common stock offering C) agents registered under the act who from time to time sell stock from their personal brokerage accounts D) a person with no office in the state who effects securities transactions with no more than 5 individual residents of the state in any 12-month period
D
When a broker-dealer engages in a customer transaction from its own account, which of the following statements are TRUE? I. Partners of the broker-dealer are trading in their personal accounts. II. The broker-dealer is trading from its inventory with customers. III. The broker-dealer must disclose its capacity as a principal in the transaction. IV. The broker-dealer must disclose its capacity as agent in the transaction. A) III and IV B) I and III C) I and IV D) II and III
D
Which of the following are not specifically excluded from the definition of an investment adviser under the Uniform Securities Act? I. An investment adviser representative of an advisory firm who makes securities recommendations on a regular basis for compensation II. A temporary employee hired to assist in administrative responsibilities of an advisory firm III. Any person who is a federal covered investment adviser IV. A person who, on a regular basis for compensation, offers specific investment advice to clients as to the value of securities A) II and IV B) II and III C) I and IV D) IV only
D
One way in which an investment adviser acting in the capacity of an agent in a transaction with a client differs from a broker-dealer performing the same task is that the investment adviser A) shall obtain client consent before completion of the transaction B) shall disclose the agency capacity before the transaction C) may not charge a commission on the transaction D) shall notify the Administrator of its capacity in the proposed transaction
A
The agreement that the Administrator can receive subpoenas on behalf of a registered agent, broker-dealer, or investment adviser involved in any securities sale that violates the Uniform Securities Act is the A) consent to service of process B) agreement to actionable offenses C) right of retribution D) cease and desist order
A
Traditionally, banks have been excluded from the definition of a broker-dealer. However, under recent federal legislation, a bank is included in the definition if it A) bought and sold securities on behalf of customers in a wholly owned brokerage subsidiary B) refers customers to a clearly identified third-party brokerage house not under the control of the bank C) conducts securities custodial activities D) conducts personal trust activities
A
Under the USA, all of the following are exempt transactions EXCEPT A) unsolicited customer orders B) a sale of a primary offering registered with the SEC C) transaction executed by a trustee in bankruptcy D) isolated nonissuer transactions
B
Under the Uniform Securities Act, which of the following are TRUE regarding the registration of a successor firm? I. The successor firm need not be in existence when the application for registration is filed. II. A filing fee is required with the application. III. The successor firm's registration will be effective for the unexpired portion of the year. A) II and III B) I and III C) I, II and III D) I and II
B
Under the Uniform Securities Act, who automatically becomes registered as an agent when a broker-dealer's registration becomes effective? A) Only one individual designated on the application for registration B) Certain partners, officers, or directors of the firm C) Any individual employed by or associated with the firm who will have sales responsibilities D) No one
B
Which of the following are NOT included in the definition of an agent in the Uniform Securities Act? I. A licensed broker-dealer II. An officer of an issuer who only represents the issuer in selling shares to a broker-dealer underwriting the company's securities III. An officer who represents an issuer of non-exempt securities in the sale of those securities to the public without receiving any compensation IV. An employee of a broker-dealer whose only transactions are with institutional clients A) III and IV B) I and II C) I and III D) II and IV
B
Which of the following is NOT an agent? A) One who represents a registered broker-dealer selling unregistered exempt securities B) One who represents an issuer in effecting exempt transactions C) One who represents a registered broker-dealer selling securities listed on the NYSE to individual clients D) One who represents an issuer of any exempt security
B
