Series 63 Practice Test

Series 63

Uniform Securities State Law Examination Practice Test Questions Set I –

1. Under the Uniform Securities Act, broker-dealer registration takes effect,

a. When the Administrator notifies them

b. Noon on the 30th day after the registration is filed

c. Noon on the 10th day after registration is filed

d. Noon on the 45th day after the registration is filed

2. When must an investment adviser provide clients a copy of form ADV Part II or a brochure containing similar information?

a. At the time of entering into an advisory contract, as long as the client can terminate the contract without penalty within three days
b. Within 24 hours of entering into an advisory contract
c. Within five days of entering into an advisory contract
d. At least 48 hours prior to entering into an advisory contract

3. Under the Uniform Securities Act, an Administrator can require all of the following when registering a broker-dealer except:

a. Minimum experience standards
b. Passing a qualifying examination
c. Minimum dollar amount of net capital
d. Minimum dollar amount of surety bond coverage

4. Under the Uniform Securities Act, the Administrator may deny, revoke or suspend a broker-dealer’s registration if the broker-dealer:

I Fails to properly supervise employees
II Has been suspended by an Administrator in another state
III Has been convicted of a financial crime within the last ten years
IV Becomes insolvent

a. I & IV
b. I & III
c. II & III
d. I, II, III & IV

5. Under the Uniform Securities Act, if the Administrator believes it is in the public interest, how often may the Administrator inspect a broker-dealer’s books?

a. Annually
b. Monthly
c. Quarterly
d. At any time

6. Under the Uniform Securities Act, if a sales representative fails to renew their registration, which of the following is true?

a. Registration is revoked by the Administrator
b. Registration is automatically renewed
c. Registration expires
d. A 30 day grace period applies

7. Under the Uniform Securities Act, the Administrator can revoke or suspend a sales representative’s registration if the applicant

I Was arrested for a securities-related issue
II Has been charged with a felony
III Supplied false information on the registration application

a. I, II & III
b. II & III
c. I & II
d. III only

8. Miss Jane Broker-dealer has no office in state and transacts fewer than five trades during a 12¬ month period. Which of these statements are true?

I The broker-dealer is required to register with the Administrator
II The broker-dealer is not required to register with the Administrator
III The transactions are considered exempt
IV The transactions are not considered exempt

a. I & IV
b. II & III
c. II & IV
d. I & III

9. Federal covered investment advisers may be exempt from registration if they do not advertise as a planner and if in the last 12 months they have less than:

a. Fifteen clients
b. Three clients
c. Five clients
d. Ten clients

10. Which of the following are considered exempt from registration as an investment adviser under the Uniform Securities Act?

a. An investment adviser with no place of business in the state who gives investment advice only to federal-covered advisers
b. An investment adviser representative
c. A federal covered adviser
d. A trust department of a bank

11. Under the Uniform Securities Act,  what size surety bond coverage is required for a broker-dealer?

a. $20,000
b. $10,000
c. $5,000
d. $25,000

12. Which of the following are required when a sales representative registers with the Administrator?

I Fingerprinting
II Registration application
III Filing fee
IV Consent to service of process

a. I, II, III and IV
b. II, III and IV
c. III and IV only
d. I and II only

13. Under the Uniform Securities Act, which of the following does the Administrator require the registrant file, in order to maintain registration?

I Sales literature
II Advertising
III Form letters
IV Prospectuses

a. II only
b. I & II
c. IV only
d. I, II, III & IV

14. Which of the following statements about post-registration requirements are true?

I Sales representatives are subject to post-registration requirements
II Broker-dealers are subject to post-registration requirements
III Investment advisers are subject to post-registration requirements
IV Investment adviser representatives are subject to post-registration requirements

a. I & II
b. I & IV
c. II & III
d. I, II, III & IV

15. The Administrator can refuse a sales representative’s application if the applicant has been convicted of a felony or securities misdemeanour in the past

a. 10 years
b. 20 years
c. 5 years
d. 2 years

16. Under the Uniform Securities Act, the Administrator can require the following items for registration as a sales representative,

I. Passing a qualifying exam
II. Surety bond
III. Minimum net capital

a. III only
b. I & II only
c. I only
d. I, II & III

17. Which of the entities below does the definition of a broker-dealer under the Uniform Securities Act exclude?

I A sales representative of a broker-dealer
II A securities issuer
III A representative of a securities issuer
IV Someone who has a place of business in the state but trades securities only for institutions

a. I
b. II & III
c. I, II, III & IV
d. I, II & III

18. In most States, under the Uniform Securities Act, when can a sales representative be affiliated with more than one broker-dealer?

a. Only when the Administrator has given written consent
b. When each broker-dealer has given written consent
c. Under no circumstances
d. Only if the broker-dealers are affiliated

19. Under what circumstances can the Administrator deny an investment adviser’s registration?

a. Insufficient advisory experience
b. Conviction of a felony 14 years ago
c. Failure to pay required fees
d. The investment adviser’s partner (who is not active in the investment
adviser business) filed for bankruptcy three years ago

20. Under the Uniform Securities Act, the definition of “broker-dealer” includes:

I Securities issuers
II Any person who trades securities for their own or the accounts of others
III Financial institutions regulated under banking laws
IV Sales representatives who transact trades for broker-dealers

a. I & III
b. I, II & IV
c. II & IV
d. II only

21. Which of the following actions does the Uniform Securities Act permit for a registered sales representative?

a. Making trades in a state where the sales representative is registered, but the broker-dealer is not
b. Making trades in a state where the sales representative is not registered, as long as the broker-dealer is registered in that state
c. Offering investment advisory services as long as no separate fee is charged and the services are incidental to his or her brokerage services
d. Soliciting trades for non-exempt unregistered securities, as long as the sales representative is registered in the state

22. If an investment adviser representative terminates employment with a federal covered investment adviser, which of the following statements are true:

a. Both the federal covered adviser and the investment adviser representative must notify the Administrator within 30 days
b. The investment adviser representative must notify the Administrator promptly
c. Both the federal covered adviser and the investment adviser representative must notify the Administrator promptly
d. The federal covered adviser must notify the Administrator promptly.

23. An unregistered employee of a registered broker-dealer may only sell securities

a. If the transaction is exempt
b. In unsolicited transactions
c. If the securities are exempt
d. None of the Above

24. Under the Uniform Securities Act, the Administrator of California may examine the financial books and records of all of the following, except

a. The branch office of a broker-dealer in California whose main office is in Illinois
b. A broker-dealer in Illinois that has no California branches and doesn’t trade in California
c. The main office in Illinois of the California branch referred to above
d. Investment adviser’s office in California

25. Under the Uniform Securities Act, which investment adviser representatives do not have to register with the Administrator?

a. Those that work for a federal covered adviser but have only clerical duties
b. Those that work for a federal covered investment adviser
c. Those that work for an investment adviser registered with the Administrator
d. Those that are a partner of an investment adviser firm registered with the Administrator

26. Under the Uniform Securities Act, when a sales representative wants to withdraw their registration, which of the following statements would be true?

I The sales representative must notify the Administrator
II The broker-dealer must notify the Administrator
III In case of a customer complaint, the Administrator can apply penalties for two years from the withdrawal date
IV The withdrawals becomes effective 30 days after date of notification

a. I only
b. I, II, III & IV
c. II & IV
d. I, II & IV

27. Under the Uniform Securities Act, registration requirements for an investment adviser representative may include all of the following except

a. Posting a surety bond
b. Filing a consent to service of process
c. Passing a qualification exam
d. All of the Above

28. Which of the following statements are true about registration with the Administrator?

I. Federal covered investment advisers with a place of business in the state must file notice in the state.
II. Investment advisers with a place of business in the state that are not registered with the SEC must register in the state
III. Investment adviser representative’s with a place of business in the state, who work for an investment adviser who is not registered with the SEC, must register in the state.
IV. Investment adviser representatives with a place of business in the state, who work for an investment adviser who is registered with the SEC, must register in the state.

a. II & III
b. II & IV
c. I, II, III & IV
d. I, II & III

29. Under the Uniform Securities Act, certain investment advisers with no place of business in the state are exempt from registration. These include advisers whose only clients are

I Broker-dealers
II Other investment advisers
III Insurance companies
IV Investment companies

a. I, II, III & IV
b. I, II & IV
c. I & II
d. III & IV

30. How long is a broker-dealer’s registration in effect?

a. A set period of time which may vary from state to state
b. For two years
c. For one year
d. Administrator may make certain changes to the basic provisions of the Act

31. All of the following information must be disclosed by an investment adviser to a potential client under the brochure rule except

a. Types of investments offered by the investment adviser
b. The investment adviser’s investment policies
c. The investment adviser’s investment practices
d. States where the investment adviser is registered

32. An investment adviser who provides investment advice only to investment companies is:

I Subject to state registration
II Subject to federal registration
III Exempt from state registration
IV Exempt from federal registration

a. I & II
b. I & IV
c. II & III
d. III & IV

33. Under the Uniform Securities Act, each of the following would be excluded from the definition of a broker-dealer, except one which has no place of business in a state and,

a. Has less than six clients in that state within the last 12 months
b. Transacts business only with insurance companies
c. Transacts business only with securities issuers
d. Transacts business only with other broker-dealers

34. Which of these investment advisers are defined under the Uniform Securities Act as an adviser in the State that is exempt from registration in the State?

a. A federal covered investment adviser
b. An accountant who gives only incidental advice about securities
c. An investment adviser who has no place of business in the state and advises only insurance companies
d. A publisher of a general circulation newsletter about investments

35. Under the Uniform Securities Act, the registration of a broker-dealer or a sales representative may be suspended by the Administrator in certain circumstances. Which of the following statements are true?

I If the broker-dealer’s registration is suspended, all of its sales representative licenses are suspended
II If a sales representative’s registration is suspended, the broker-dealer’s registration is suspended
III If the broker-dealer’s registration is suspended, its sales representatives are permitted to become associated with another broker-dealer

a. I, II & III
b. II & III
c. I only
d. I & III

36. Under the Uniform Securities Law, broker-dealers are required to sign a consent to service of process. Filing such a consent means that

a. The individual may not be required to give self-incriminating testimony in the event of a proceeding
b. The Administrator is permitted to assess fines or other penalties in the event of a violation of the Act
c. The individual is under the jurisdiction of the Administrator for up to a year after registration is withdrawn
d. The Administrator is empowered to receive suits on behalf of the individual

37. Each of the following persons meet the definition of a sales representative except an employee of a broker-dealer who performs this function

a. Gives securities quotes by phone to the broker-dealer’s customers
b. Executes securities transactions only for exempt securities
c. Accepts securities orders from the broker-dealer’s customers
d. Executes securities transaction only for non-exempt securities

38. Under the Uniform Securities Act, an investment adviser with no place of business in the State is exempt from registration if they only offer advice to employee pension, benefit or profit sharing plans with assets greater than: 

a. $500,000
b. $3,000,000
c. $300,000
d. $5,000,000

39. Under the Uniform Securities Act, an investment adviser representative’s registration becomes effective

a. 30 days from the date the registration was filed or earlier if the Administrator approves it sooner
b. 30 days from the date the registration was filed
c. Whenever the Administrator orders it
d. 45 days from the date the registration was filed

40. Under the Uniform Securities Act, which of the following must register as a broker-dealer with the state?

I Anyone who trades securities for their own account
II Anyone who trades securities for the public
III Anyone with no place of business in the state who has fewer than six clients in the last 12 months
IV Anyone who makes investment recommendations for compensation

a. III & IV
b. I, II, III & IV
c. I & II
d. I, II & III

41. A broker-dealer needs to contact a client that is currently vacationing in a state where the broker-dealer is not registered. Under the Uniform Securities Act, which of the following statements is true?

a. The broker-dealer may contact the client even if not registered in the State
b. The broker-dealer may contact the client only if the information would help the client to achieve a gain
c. The broker-dealer may contact the client only if the information would help the client to avoid a loss
d. The broker-dealer may not contact the client unless registered in that State

42. Under the Uniform Securities Act, each of the following are excluded from the definition of an investment adviser except

a. A broker-dealer
b. An investment adviser representative
c. A federal covered adviser
d. An investment adviser with no place of business in the state, and whose only clients are broker-dealers

43. Under the Uniform Securities Act, a broker-dealer’s registration can be revoked for all the following reasons except

a. The broker-dealer fails to file financial reports with the Administrator
b. The broker-dealer fails to file advertising with the Administrator
c. The broker-dealer fails to maintain required records
d. The broker-dealer fails to file written customer complaints with the Administrator

44. If a sales representative moves from one broker-dealer to another, who must notify the Administrator?

I The sales representative
II The previous broker-dealer
III The new broker-dealer

a. I only
b. II only
c. III only
d. I, II & III

45. Under the Uniform Securities Act, which of the following are NOT required to register with the Administrator?

I A broker-dealer with no office in the state that deals only with financial institutions
II A broker-dealer with no office in the state who deals only with other broker-dealers
III Any person who trades securities for his own account or for the accounts of others
IV A sales representative of a broker-dealer

a. III & IV
b. I & II
c. II & IV
d. II & III

46. Under the Uniform Securities Act, a person who has no place of business in the state and transacts securities trades only with financial institutions in that state would be:

a. Excluded from the definition of a broker-dealer, and not required to register
b. Defined as an investment adviser who must register with the Administrator
c. Excluded from the definition of an investment adviser, and required to register
d. Deemed a broker-dealer who must register with the Administrator

47. Which of the following persons would NOT be excluded from the definition of a sales representative?

a. A person who represents the issuer in a transaction with the underwriters
b. A person who represents the issuer in occasional non-issuer transactions
c. A person who represents the issuer in a transaction with investors
d. A person who represents the issuer in a transaction with financial institutions

48. Which of the following can a registered sales representative perform under the Uniform Securities Act?

a. Make trades in a state where the sales representative is registered, but the broker-dealer is not
b. Solicit trades for non-exempt unregistered securities, as long as the sales representative is registered in the state
c. Offer investment advisory services as long as no separate fee is charged and the services are incidental to his or her brokerage services
d. Make trades in a state where the sales representative is not registered, as long as the broker-dealer is registered in that state

49. Under the Uniform Securities Act, which investment adviser representatives do not have to file a registration application with the Administrator?

a. Those that work for a federal covered adviser but have only clerical duties
b. Those that work for an investment adviser registered with the Administrator
c. Those that are a partner of an investment adviser firm registered with the Administrator
d. All of the above must register

50. Which of the following are required for registration as a sales representative?

I Fingerprinting
II Registration application
III Filing fee
IV Consent to service of process

a. III and IV only
b. I and II only
c. II, III and IV
d. I, II, III and IV

51. Under what circumstances can the Administrator initiate revocation or suspension actions against a registered broker-dealer?

I Based on facts known at the time of initial registration
II Based on a conviction for violation of the Securities Exchange Act of 1934
III Based on a suspension order entered by another State Administrator
IV After a one year period following the broker- dealer’s withdrawal from registration

a. I, II, III & IV
b. I, II & III
c. II & III
d. I & IV

52. A sales representative must register if they are employed by a broker-dealer, handle securities trades and are compensated by:

I Commissions
II Salary
III Flat fee per transaction

a. I only
b. II and III
c. III and I
d. I, II & III

53. If the Administrator summarily suspends a sales representative’s application, which of the following is not true:

a. The Administrator must notify the applicant promptly after the suspension is ordered
b. A court order must be issued before the Administrator may suspend the application
c. The Administrator must provide an opportunity for a hearing within 15 days
d. The applicant cannot act as an sales representative in that state

54. Which of the following items are not defined as securities under the Uniform Securities Act?

a. Fixed annuities
b. Bonds issued by a credit union
c. Canadian bonds
d. California municipal bonds

55. Which of the entities below would be excluded from the definition of a broker-dealer under the Uniform Securities Act?

I A sales representative of a broker-dealer
II A securities issuer
III A representative of a securities issuer
IV Someone who has a place of business in the state but trades securities only for institutions

a. I
b. II & III
c. I, II & III
d. I, II, III & IV

56. Once an individual has registered as a broker-dealer, which of the following individuals is automatically registered as an agent or sales representative of the broker-dealer?

a. An officer of the broker-dealer
b. A director of the broker-dealer
c. Both of the above
d. None of the above

57. Chris Crook`s registration was revoked due to a felony conviction for a securities-related crime 8 years ago. He is prohibited from registration as:

I Broker-dealer principal
II Sales representative
III Investment adviser IV Investment adviser representative

a. I
b. I & II
c. III & II
d. I, II & III

58. Which of the following is automatically registered with the registration of an investment adviser?

a. Sales representative of the investment adviser
b. Administrative employee of the investment adviser
c. Solicitor of the investment adviser
d. Partner of the investment adviser

59. Which of the following statements are not true?

a. The broker-dealer’s records must be kept for a specific amount of time as required by federal securities laws
b. The Administrator may inspect a broker-dealer’s records at any time
c. Different records are required for broker-dealers than for investment advisers
d. An annual audit of a broker-dealer must be scheduled with the Administrator

60. If a corporation listed on the New York Stock Exchange plans to distribute a stock dividend, which of the following statements is true?

a. The Corporation does not have to file any registration with the Administrator because the transaction is exempt.
b. The Corporation must file a registration by qualification with the Administrator
c. The Corporation must file a registration by filing with the Administrator
d. The Corporation must file a registration by coordination with the Administrator

Answer Key

1. B
The normal effective date is 30 days after the registration is filed. This also applies to registration of sales representatives, broker-dealers, investment advisers and investment adviser representatives.

2. D
An investment advisor must provide a brochure to clients at least 48 hours prior to entering into the contract. If the client has the right to terminate the contract without penalty within five days the brochure can be provided at the time of entering into the contract.

3. A
An administrator does not have the power to require any specific years of experience or other similar standard. However, the administrator does have the right to require the applicant to pass a qualifying exam and have a minimum net capital as well as a minimum surety bond coverage.

4. D
The Administration may deny, revoke or suspend a broker-dealer’s registration for a number of reasons, including failure to supervise employees, becoming insolvent, conviction of a financial crime or suspension by an Administrator in another state.

5. D
As long as the Administrator believes it is in the public interest, they may inspect the broker-dealer’s books and records as often as they deem necessary.

6. C
No action needs to be taken by the Administrator and no grace period applies. The representative must re-apply.

7. D
The Administrator can deny, revoke or suspend the registration if the applicant has made false statements or omitted required information. The applicant must be convicted of a felony or any securities-related crime, not simply charged or arrested.

8. B
This is considered an isolated non-issuer transaction exemption, the broker-dealer is not required to register, and the transactions are considered exempt.

9. D
As long as they have less than 10 clients and assuming none of the clients were registered investment companies.

10. A
An investment adviser with no place of business in the state who gives investment advice only to federal-covered advisers is exempt. Be careful of exempted vs. excluded.

11. B
Most states require a $10,000 surety bond however, the Act states that the Administrator may set the amount.

12. A
All of these are required for an initial sales representative registration, as well as for registration for broker-dealer, investment adviser and investment adviser representative.

13. D
The Administrator can require a registrant to file copies of advertising, prospectuses, sales literature and form letters.

14. C
Post-registration requirements include maintenance of books and records, required filings with the Administrator, providing customer reports and filing advertising and sales literature. These requirement apply only to broker-dealers and investment advisers, not to sale representatives and investment adviser representatives.

15. A
The Administrator may deny the application if the conviction occurred within the last ten years.

16. B
Passing a qualifying exam is required for all sales representatives, while a surety bond is typically required only when the sales representative will take custody of customer funds or have discretionary authority over customer accounts. Minimum net capital is incorrect, since that is required only for broker-dealers, not their representatives

17. D
The Uniform securities act defines a securities issuer separately, and specifically excludes a representative of the issuer from the definition of a broker-dealer. A sales representative of a broker- dealer is also separately defined.

While someone who has no place of business in the state and trades securities only for institutions is excluded from the definition of a broker-dealer, in this question the individual does have a place of business in the state and so is included in the definition of a broker-dealer.

18. D
In most states, the only time a sales representative can be registered with more than broker-dealer is if they are affiliated.  Some states, however, permit sales representatives to register with two non-affiliated broker-dealers.

19. C
The Administrator may deny a registration for failure to pay fees. Bankruptcy is only cause if it is the investment adviser not their partner. Felony convictions are only cause if it is within the past ten years. The Administrator may not set minimum previous experience standards.

20. D
The Uniform Securities Act does not consider sales representatives, banks and securities issuers broker-dealers. Sales representatives are registered representatives of broker-dealers.

21. C
A sales representative may not make trades in a State unless both the sales representative and the broker-dealer are registered in that State.

A sales representative may not solicit trades for non-exempt unregistered securities, although the Act permits unregistered exempt securities such as municipal bonds.

Sales representatives are permitted to provide investment advisory services, as long as no separate fee is received and the services are incidental to the brokerage services.

22. B
The federally covered investment adviser would not have to notify the State as they are not registered with the State. The investment adviser representative must notify the Administrator promptly of the termination.

23. D
In order to sell securities, the employee must register, and the type of security or transaction is irrelevant. The only non-registered person who may sell securities is one who meets an exemption such as an individual that represents an issuer.

24. B
The Administrator has jurisdiction over investment advisers, broker-dealers and sales representatives located in the state or involved with securities offers directed into the state. However, the Administrator has no jurisdiction over an office located outside the state, which has no branch office or securities activities within the state.

25. A
Clerical staff do not have to register.  Upon registration with the Administrator as an investment adviser, all partners, directors or officers of the firm are automatically registered as investment adviser representatives.

26. B

Withdrawal from licensing as a broker-dealer, sales representative, investment adviser or representative of an investment adviser becomes effective 30 days after receipt by the Administrator of an application to withdraw or within such shorter period as the Administrator determines, unless:

(a) A proceeding to revoke or suspend is pending when the application is filed;

(b) A proceeding to revoke or suspend or to impose conditions upon the withdrawal is instituted within 30 days after the application is filed; or

(c) Additional information is requested by the Administrator regarding the application.

Although no proceeding is pending or instituted and withdrawal becomes effective, the Administrator may institute a proceeding within 2 years after withdrawal

27. D
An investment adviser representative may be required to pass a qualification exam, file a consent to service of process and post a surety bond.

28. C
III & IV are correct, since investment adviser representatives register at the State level, not the federal level. II is correct since an investment adviser who does not register with the SEC must register with the State. I is correct since even though the State cannot require a federally registered investment advisers to register, they can require a notice filing.

29. A
Investment advisers with no place of business in the State, and who do not deal with the public are not required to register.  This includes all of the given options, broker-dealers, other investment advisers, insurance companies, investment companies.

30. A
Most broker-dealer registrations are in effect for one year, although the time frame varies from State to State.

31. D
The brochure rule requires the investment adviser to provide the ADV Part II (or a brochure disclosing the same information) to potential clients. The ADV Part II does contain information such as the adviser’s background, experience, investment policies and practices, as well as types of investments. However, basic registration information such as States where the adviser is registered is contained in the ADV Part I, which is not required to be given to clients.

32. C
An adviser to investment companies falls under federal registration requirements. Federal covered investment advisers are always exempt from state registration.

33. A
There is an exclusion for broker-dealers with no office in the state and who do business with only other professionals and not the public. Issuers, insurance companies, banks and other broker-dealers all fall under this category. Option A is only incorrect because broker-dealers with less than six clients are exempt from registration, not excluded from the definition of a broker-dealer.

34. C
While all the responses may appear to be correct, they are not “exempt” from registration, they are “excluded” from registration. This is a difference that is likely to be tested.

35. D
Suspension of the sales representative’s registration has no impact on the broker-dealer’s registration. However, suspension of the broker-dealer’s registration will suspend the sales representatives’ registration. In this case, the sales representative is free to join another broker- dealer.

36. D
The consent to service of process means legal papers, such as subpoenas, meant to be served to a registered person, may be served to an Administrator, and will have the same legal force as if served to the individual or company in person. Consent to service of process gives the Administrator power of attorney to receive NON-CRIMINAL grievances on behalf of a registered person. 

37. A
Any one who accepts orders or executes any type of securities transactions must be registered as a sales representative. Giving securities quotes does not require registration.

38. D
As long as the investment adviser has no place of business in the state and only offer advice to employee benefit plans with assets of at least $5,000,000, the adviser is exempt from registration.

39. A
Registration is effective on approval. There is a provision for 30 days processing, however, the Administrator can approve the registration sooner. This is true for registrations of sales representatives, broker-dealers and investment advisers.

40. C
A person or entity that transacts securities trades for their own accounts or for the accounts of others must register as a broker-dealer. However, there is an exemption for those with no place of business in the State who have less than six clients in the past 12 months. Anyone who makes investment recommendations for compensation must register as an investment adviser, not a broker-dealer.

41. A
While it is true that a broker-dealer must generally be registered in a state to contact a client in that state, there are exceptions such as this scenario.

42. D
This question asks about exclusion, not exemption. Broker-dealers, investment advisers representatives and federal covered investment advisers are all exempt from registering with the Administrator.

43. D
Broker-dealers are required to file advertising and financial reports with the Administrator, as well as to maintain specific records. There is no requirement for broker-dealer to file customer complaints with the Administrator.

44. D
All parties are required to notify the Administrator.

45. B
A broker dealer or an agent must register in every state where they do business, unless an exemption or exclusion is available. There is an exclusion for broker-dealers with no office in the State who only do business with other professionals and not the public.

46. A
This person would not be defined as an investment adviser, since there is no reference to receiving compensation for investment advice. While a person who transacts securities trades in a State is generally considered a broker-dealer, there is an exclusion from the definition for those with no place of a business in the State and who only deal with professional investors such as banks and insurance companies.

47. B
The Act does exclude individuals who do not deal with the public from registering as a sales representative. There is also a category of exempt transactions for those who handle only isolated transactions with someone other than the issuer (typically in the secondary market). The term “isolated” is not defined, but does not include repeated transactions by the same person.

48. C
A sales representative may not make trades in a state unless both the sales representative and the broker-dealer are registered in that state. A sales representative may not solicit trades for non-exempt unregistered securities, although unregistered exempt securities such as municipal bonds are permitted. A sales representative is permitted to provide advisory services that are incidental to the brokerage services and provided at no cost.

49. C
Upon registration with the Administrator as an investment adviser, all partners, directors or officers of the firm are automatically registered as investment adviser representatives

50. D
All of the given choices are required for registration as a sales representative, fingerprinting, registration application, filing fee and consent to service of process.

51. C
The Administrator can initiate suspension or revocation actions based on a conviction for violation of the Securities Exchange Act of 1934 (II) or based on a suspension order entered by another State Administrator (III). Choice I is incorrect, since any facts known at the time of registration would mean the registration would be declined. Choice IV is incorrect since the Administrator has no jurisdiction over a broker-dealer one year after withdrawal.

52. D
If the employee of a broker-dealer performs securities trades they must be registered, regardless of the method of payment.

53. B
A court order is not required for the Administrator to summarily suspend the application. Choices A, C and D are correct. The Administrator must notify the applicant promptly, offer a hearing within 15 days, and the applicant cannot act as a sales representative until the suspension has been removed.

54. A
Fixed annuities are not defined as securities. Choices B, C and D, (Bonds issued by a credit union, Canadian bonds, California municipal bonds) are defined as securities, but are exempt from registration.

55. C
Choices I, II and III are excluded from the definition of a broker-dealer. Choices I and II, a sales representative of a broker-dealer, and a securities issuer are separately defined. Choice III, a representative of a securities issuer, is specifically excluded.

An individual who has no place of business in the state and trades securities only for institutions is excluded, however the individual in this question does have a place of business in the state, and is therefore included in the definition of a broker-dealer.

56. C
Provided they are named in the registration application, any officers, partners or directors of the broker-dealer are automatically registered.

57. D
The Administrator may suspend, deny or revoke registration of an individual in any capacity, including, Broker-dealer principal, Sales representative, Investment adviser, or Investment adviser representative, if the individual has a felony conviction for a securities-related crime in the last 10 years. This applies to a convictions in any State.

58. D
Clerical employees, solicitors, sales representatives and other employees do not need to registered, provided they are not giving investment advice. Directors, partners and other officers named in the investment adviser’s registration application are automatically registered as investment adviser representatives.

59. D
Federal securities laws specify the record keeping requirements for Broker-dealers and investment advisers. The Administrator may require a different period of time to Federal laws, audits or other requirements as they see fit.

Broker-dealers and investment advisers are required to keep different records as their business activities are different. The Administrator may inspect a broker-dealer’s records at any time.

60. A
Since the Corporation is listed on the New York Stock Exchange, the transaction is exempted on two counts. First, it is an exchange listed stock and second, because no commissions or other compensation is involved in the transaction.

Written by:
Modified: October 9th, 2017
Published: April 4th, 2013

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