Series 63 Questions Flashcards
Agents’ and investment adviser representatives’ registrations expire:
Annually on December 31st
How long is the consent to service of process in effect for?
As long as the person is registered
An individual has passed their Series 63 exam and has filed a registration statement to register as an agent in State A. When can this individual begin acting as an agent in State A?
30 days
An investment planning firm would not be required to register as an investment adviser in State A under any of the following circumstances, except:
The firm has an office in State A but advises only institutional investors
not an issuer under the Uniform Securities Act?
A broker-dealer
The Administrator may set all of the following requirements for a registered broker-dealer, EXCEPT:
Qualifying examinations of the firm
A broker-dealer who has no office in a state, would not need to register in the state, when:
Serving existing retail customers who are temporarily in the state
An agent does NOT include a person who:
Only advises others on their investment portfolio for compensation
Which of the following communications may be required to be filed with the Administrator in a given state?
general prospecting form letter and Ads for CMOs
According to the NASAA Recordkeeping Requirements for Investment Advisers, which of the following is TRUE regarding the preservation of an investment adviser’s records other than those required to be maintained for at least three years after termination of the firm?
Such records must be maintained in an easily accessible place for at least five years, the first two in the firm’s principal office
An agent with a place of business in the state who sells only municipal securities is not considered a what?
not considered a broker-dealer?
Federal covered securities that are required to be registered with the SEC are covered under the rules and regulations of the:
Securities Act of 1933
A broker-dealer has just changed its branch office location in State A. When does the firm need to file an amendment with the Administrator in State B?
Never
A broker-dealer buying and selling securities for the benefit of their own account as a market maker is said to be operating in what capacity?
Principal capacity
At the time of formation, any silent partner or affiliated person who will not be performing the duties of an agent or investment adviser representative, is:
Not registered automatically
When transactions or securities involved are exempt from state registration requirements, the agent representing a broker-dealer in such transactions:
Still must be registered
An investment adviser requires payment of advisory fees six months or more in advance and in excess of $500 per client. What makes this situation is correct?
This practice is in compliance with the Uniform Securities Act, but the investment adviser must file an audited balance sheet with the Administrator
What is the minimum assets under management a firm providing investment advice for compensation needs in order to become a federal covered investment adviser?
$100 million
What is the minimum assets under management a firm providing investment advice for compensation needs in order to become required to register with the SEC?
$110 Million
What is the first step in the registration process with the State Administrator?
Filing of a registration statement
Which of the following is the correct definition of a non-exempt security?
A security that must be registered under the Uniform Securities Act with the State Administrator
The preorganization certificate limit on subscribers is how many for a exempt transaction.
10
According to the Uniform Securities Act, which is true following are true regarding an investment adviser’s responsibility related to delivery of its brochure?
An investment adviser must furnish each advisory client with a written disclosure statement not less than 48 hours prior to entering into any investment advisory contract with such client, or at the time of entering into any such contract if the advisory client has a right to terminate the contract without penalty within five business days after entering into the contract.
In the absence of an order from the Administrator prohibiting an IA from assuming custody over customer funds, the IA may take custody:
As long as prompt notification is provided to the Administrator
If an agent identifies several investments, with essentially the same risks as a particular investment for his client, he/she has:
Not violated the USA
An order from the Administrator commanding the recipient to refrain from a fraudulent or prohibited practice, is an example of:
A cease and desist
These securities may be sold to institutions and retail investors, provided the trade is done on an unsolicited basis?
unregistered, non-exempt securities
In order to qualify under the world-class foreign issuer exemption, a security must meet which of the following criteria?
The issuer is not organized under U.S. or any state law. *The issuer has been in business for the past 5 years,. *The issuer has at least $1 billion or more of market value of equity shares (not including preferred stock) owned by nonaffiliates, with overall value of equity shares of at least $3 billion. *The issuer’s equity securities are listed for trading on a foreign securities exchange. Equity shares (not including preferred stock) and non-convertible debt securities (rated in the top four credit ratings) issued by world class foreign issuers are exempt from state securities registration and advertising/sales literature filing requirements.
Exempt securities are not subject to either the
registration or advertising filing requirements contained within the USA.
provinces and common stock issued by a savings and loan are exempt from USA registration.
Securities of Canada
A contract that specifies that the investment adviser’s compensation will be based on the total assets under management is
Not prohibited
Sharing in a customer’s account is
Prohibited
RRs may not engage in “off the books” securities transactions about which their broker-dealers are unaware. This practice is known as
Selling away
A person who is the subject of an order from the Administrator may appeal the order to a court within
60 days
Civil suits must be filed within
3 years of the contract of sale, or 2 years of discovery, whichever comes first. In the case of fraud, the administrator has 5 years to initiate a criminal action.
define an investment adviser as any person who provides advice about securities, as a business, for compensation.
Investment Advisers Act of 1940
clarifies the ‘ABC Test’ definition of an investment adviser and specifies criteria to identify when each of the ‘three prongs’ of the definition is met. Any person who holds themselves out to the public as being an investment adviser, provides advice on a regular basis, and receives identifiable compensation for their advice is in the business of being an investment adviser.
SEC IA-1092
Depending upon the circumstances, any person engaged in the business of effecting transactions in securities for the account of others or for its own account may potentially be considered a broker-dealer under the USA, what is excluded from the definition (4)
Banks, Trust Companies, Issuers, and Agents
The Administrator may deny a registration if the registrant failed to pay the proper application filing fee within
30 days of notification, but the order will be vacated once the fee is paid.
A buyer in a private placement transaction receives unregistered securities. These nonexempt securities avoid registration because they were sold through a private placement, which is an exempt transaction. The maximum number of offers to non-institutional investors is limited to how many?
10
Records that must be retained for the life of the firm include:
stock certificate books, partnership papers, articles of incorporation, and minutes of Board of Directors (BOD) meetings.
Individuals representing broker-dealers and issuers in securities transactions are defined
An Agent
An investment adviser must send a statement of account status to a client at least
Quarterly
Investment advisers are prohibited from being compensated based directly on
Profit
A transaction where an investment adviser acts as an agent for both the buyer and the seller of the securities is known as an
Agency Cross transaction
IA must send a summary at least annually showing of what?
showing the total number of agency cross transactions executed in the customer’s account, and the total commissions or other remuneration received
protects firms from cyber-attacks originating as a result of access to firms’ systems through third-party vendors.
Vendor Management
“publicly distributed written materials” means
s materials that are paid for by the recipients and sent to at least 35 persons.
When two or more parties are involved in a pattern of buying and selling a security merely to give the appearance of active trading, this is known as engaging in
matched sales
Insufficiently describing risks and other material facts regarding an investment is considered:
An omission
According to the USA, if a broker-dealer would like to withdraw its registration, how long does the State Administrator have to make the withdrawal effective?
30 days
not securities as they are an agreement to deliver a commodity (such as wheat, corn, crude oil, lumber, gold, sugar, or natural gas) at a specified future date and at an agreed-upon price.
Commodities Future Option
The bank is not a federal covered adviser because banks (as well as trust companies and insurance companies) are excluded from the definition of an
Investment Adviser
A Canadian broker-dealer is exempt from
Registration
