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Series 63 > Unit 1 Vocabulary > Flashcards

Unit 1 Vocabulary Flashcards

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Series 63 flashcards
1
Q

1956 National Conference of Commissions on Uniform State Law (NCCUSL)

A

Drafted the Uniform Securities Act (USA) which is a template/guide for states to follow to draft state securities legislation

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2
Q

Model Rules

A

Updates to the Uniform Securities Act (USA)

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3
Q

North American Securities Administration Association (NASAA)

A

Advisory body of state securities regulators responsible for the exam content

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4
Q

Administrator

A

Office or agency responsible for administering the security laws of a state

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5
Q

Stop Order

A

An order from the Administrator to deny, suspend, or revoke the effectiveness of any registration statement (applies to actual securities only)

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6
Q

Cease and Desist Order

A

An order from the Administrator to stop an activity (applies to securities personnel only)

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7
Q

Summary Order

A

A power of the Administrator for registration of persons and securities and applies to:
1. Postponing/suspending registration of a security professional
2. Postponing/suspending registration of a security
3. Denying/revoking a specific security on transaction exemption

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8
Q

Final Order

A

An order from the Administrator determining final action on a person, exemption, or registration

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9
Q

Person

A

Any individual (natural person) or legal person

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10
Q

Non-Person

A
  1. Minors (anyone unable to enter into contracts under laws of the state)
  2. Deceased individuals (but their estate is a person)
  3. Individuals legally declared mentally incompetent
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11
Q

Natural person

A

An individual

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12
Q

Legal Person

A

Any entity that is not an individual or a non-person; examples include corporations, partnerships, associations, trusts, unincorporated organizations, governments, and political subdivisions of governments

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13
Q

Broker-Dealer (BD)

A

Any person engaged in the business of effecting transactions in securities for the account of others or its own account

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14
Q

Broker

A

Acting on behalf of another

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15
Q

Dealer

A

Acting on behalf of themselves

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16
Q

Agent

A

A registered representative that is always an individual (natural person) who represents the broker-dealer (BD) or issuer in effecting/attempting to effect purchases or sales of securities

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17
Q

Investment Advisor (IA)

A

Any person who for compensation advises others (direct or indirect) to the value of securities or to advise in buying/selling securities OR for compensation issues or promulgate analyzes or reports concerning securities

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18
Q

Investment Advisor Representative (IAR)

A

Any individual who represents an IA in performing duties related to advisory services

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19
Q

Associated Person

A

Any partner, officer, or director of a broker-dealer (BD) or investment advisor (IA) including employees (excludes clerical and ministerial personnel)

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20
Q

Issuer

A

Any person who issues or proposes to issue a security

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21
Q

Non-issuer

A

Any person not directly or indirectly issuing a security (basic everyday trading on the stock market)

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22
Q

Security

A

A financial instrument (typically any financial asset that can be traded); examples include stocks, bonds, promissory notes, debentures, mutual funds, and variable insurance products (annuities or life insurance)

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23
Q

Exempt Security

A

A security that does not have to be registered in order to be sold and has no requirements to file advertising

24
Q

Exempt Transaction

A

The nature of the security sale is such that registration with the Administrator and filing of advertising material is not required in order to make the transaction

25
Q

Form ADV

A

Investment advisor (IA) registration form

26
Q

Form BD

A

Broker-dealer (BD) registration form

27
Q

Form U4

A

Agent and Investment Advisor Representative (IAR) registration form

28
Q

Guaranteed Security

A

A security with a guaranteed payment of principal, interest, or dividends (but not capital gains)

29
Q

Offer/Offer to Sell

A

Every attempt or offer to dispose of or solicitation of an offer to buy a security or interest in a security for value

30
Q

Offerer

A

Person trying to sell a security or interest in a security for value

31
Q

Offeree

A

Person being sold a security or interest in a security for value

32
Q

Sale/Sell

A

Every contract of sale, contract to sell, or disposition of security or interest in a security for value

33
Q

Discretion

A

When a professional has sole or shared authority to determine:
1. Whether to buy/sell (action)
2. Quantity to buy/sell (amount)
3. Specific security to buy/sell (asset)

34
Q

Fiduciary

A

A person who has an obligation to act for another’s benefit

35
Q

Fraud

A

Intentional effort to deceive someone for profit

36
Q

Statutory Disqualification

A

A status meaning an individual may be subject to disqualification under the Uniform Securities Act (USA) or a parallel provision in the Securities Exchange Act of 1934

37
Q

Stock Exchange

A

Membership or organization regulated by the Securities and Exchange Commission (SEC) where members use facilities to buy and sell stocks and bonds listed for trading or exchange

38
Q

Over the Counter (OTC) Market/Unlisted Securities

A

Market for securities traded other than on the national securities exchange under a system of dealers that offer and sell securities where prices are negotiated

39
Q

Self-Regulatory Organization (SRO)

A

An agency that is able to create and enforce industry regulations by itself; most prominent is Financial Industry Regulatory Authority (FINRA)

40
Q

Solicitor

A

Any individual who for compensation acts on behalf of an investment advisor (IA) in referring potential clients

41
Q

de minimis

A

means “about minimal things”; an exemption available to investment advisors (IA) and their representatives that applies where there is no place of business in a state and the number of retail investors is small (5 or fewer)

42
Q

Accredited Investor

A

A person who isn’t counted when computing the number of investors purchasing a private placement under Regulation D of Rule 501 of the Federal Securities Ace of 1933

43
Q

Qualified Client

A

An individual or company with the minimum financial requirements to enter into a performance based compensation contract with an investment advisor (IA)

44
Q

Qualified Purchase

A

An individual or family business that has over $5M in investments or an individual/entity that invests over $25M on their own account or on another’s behalf

45
Q

Registrant

A

Security professionals (BDs, DAs, agents, and IARs) or security issuers who are in the process of registering or who have registered with the Administrator

46
Q

Institution

A

Examples include banks, trust companies, savings and loan associations, insurance companies, investment companies, employee benefit plans with assets of not less than $1M, and government agents or instrumentalities

47
Q

National Securities Markets Improvements Act of 1996 (NSMIA)

A

Promotes efficiency in capital formation in financial markets and generally preempts state blue-sky laws which eliminates the dual system of state and federal registration of certain securities and investment advisors (IAs)

48
Q

Blue-Sky Law

A

State law

49
Q

State

A

Any of the 50 states and territories or possessions of the United States, DC, and Puerto Rico

50
Q

Surety Bond

A

Guarantees that securities professionals will adhere to the law and covers losses if a security professional acts criminally

51
Q

Retail Client

A

Individuals who meet the standard of accredited investor

52
Q

Holding Company

A

A company whose primary business is holding and controlling interest in securities or other companies

53
Q

Exclusion from a Definition

A

A person is not subject to the provisions of state law that refer to agents

54
Q

Exemption of Registration Under the Uniform Securities Act (USA)

A

A common example is when a security is exempt form the registration requirements of the Uniform Securities Act (USA)

55
Q

Wrap Fee Program

A

A program in which any client is charged a specified fee or fees not based directly not transactions in the client’s account for investment advisory purposes and execution of client transactions

Series 63 (2 decks)

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