Series 63 – Uniform Securities Agent State Law Exam Definitions and Registration Requirements 2 — Questions and Answers
Question 1: Which of the following individuals is excluded from the definition of 'agent' under the USA?
- A sales representative selling mutual funds
- An employee of an issuer who sells securities in exchange for commissions
- An employee who represents an issuer in selling exempt securities and receives no commission (Correct answer)
- A broker-dealer representative who solicits clients
Correct answer: An employee who represents an issuer in selling exempt securities and receives no commission
An individual representing an issuer in selling exempt securities and receiving no commission-based compensation is excluded from the definition of agent.
Question 2: What information is required on Form U4 when registering as an agent under the USA?
- Only employment history for the past two years
- Disclosure of felony convictions and certain misdemeanor convictions, among other background information (Correct answer)
- Only educational background
- Only current employer information
Correct answer: Disclosure of felony convictions and certain misdemeanor convictions, among other background information
Form U4 requires detailed disclosure including criminal history, regulatory actions, civil judicial actions, customer complaints, and employment history.
Question 3: Which of the following securities is a 'covered security' that preempts state registration requirements?
- Municipal bonds issued in a neighboring state
- Securities listed on the NYSE (Correct answer)
- Securities sold only within one state
- Securities issued by small local corporations
Correct answer: Securities listed on the NYSE
Securities listed on national exchanges like the NYSE are 'covered securities' under NSMIA and are exempt from state registration requirements.
Question 4: Under the USA, a broker-dealer that has no office in a state and only deals with institutional clients in that state may qualify for which status?
- Full registration as a broker-dealer
- Exempt from state registration (Correct answer)
- Limited registration only
- Temporary registration pending full approval
Correct answer: Exempt from state registration
Broker-dealers with no place of business in a state who deal exclusively with institutional investors may be exempt from state registration.
Question 5: What must a registered agent do when terminating employment with a broker-dealer under the USA?
- File a new registration immediately with the new employer
- Notify the Administrator and the broker-dealer promptly of the termination (Correct answer)
- Wait 30 days before registering with a new firm
- Do nothing since the registration transfers automatically
Correct answer: Notify the Administrator and the broker-dealer promptly of the termination
Both the agent and the broker-dealer must promptly notify the Administrator when an agent terminates their employment with the firm.
Question 6: Under the USA, which entity has the authority to deny an initial registration application?
- Only the courts
- The state Administrator (Correct answer)
- Only FINRA
- Only the SEC
Correct answer: The state Administrator
The state Administrator has the authority to deny, suspend, or revoke registrations under the USA.
Series 63 – Uniform Securities Agent State Law Exam Definitions and Registration Requirements 2
Which of the following individuals is excluded from the definition of 'agent' under the USA?