Uniform Securities Agent State Law Flashcards

Under the Uniform Securities Act, which of the following transactions is considered a 'non-issuer transaction'?

Answer: An investor selling previously purchased stock through a broker-dealer

A non-issuer transaction involves the sale of securities by someone other than the issuer, such as an investor reselling shares in the secondary market.

A state securities administrator may deny registration of a broker-dealer if the firm's principals:

Answer: Have been convicted of a securities-related felony within the past 10 years

The USA allows the administrator to deny registration if key personnel have been convicted of securities-related felonies within the past 10 years.

Which of the following is TRUE regarding the registration of securities under the Uniform Securities Act by coordination?

Answer: It becomes effective simultaneously with the federal registration under the Securities Act of 1933

Registration by coordination allows the state registration to become effective at the same time as the federal Securities Act of 1933 registration.

An agent who receives a customer order to buy a security but instead purchases the security for the agent's own account and sells it to the customer at a higher price has committed:

Answer: Interpositioning

Interpositioning occurs when a broker-dealer or agent places themselves between the customer and the best available market price, profiting at the customer's expense.

Under the USA, a 'federal covered adviser' is exempt from state registration requirements but must:

Answer: File a notice filing and pay fees in states where it has clients above a threshold

Federal covered advisers are exempt from state registration but must submit notice filings and pay applicable fees in states where they have clients.

Which of the following actions would constitute 'churning' in a customer's account?

Answer: Executing excessive trades primarily to generate commissions for the agent

Churning is the practice of executing excessive transactions in a customer's account to generate commissions, without regard for the customer's investment objectives.

Under the Uniform Securities Act, an investment adviser is required to maintain its books and records for a minimum of:

Answer: 5 years

The USA requires investment advisers to maintain their books and records for a minimum of 5 years.