Series 63 Exam 2024/2025 with 100% Accurate Solutions, Exams of Nursing

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SERIES 63 EXAM 2024/2025 WITH 100%

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Under Rule 147, securities sold within the borders of one state are exempt from: a) state registration b) federal registration c) state and federal registration d) none of the above - Precise Answer ✔✔b) federal registration Rule 147, also known as Intrastate Offerings, are exempt from federal registration. However, state registration may be required. Which of the following securities is NOT nonexempt, under the uniform securities act? a) stock issued by a Canadian Corporation b) Bigbux discount stores stock trading OTC c) M & L Computer company stock that does not trade on an exchange or Nasdaq d) The city of Pasadena, California bond, sold by an agent at Walck and Walker Broker Dealer - Precise Answer ✔✔d) The city of Pasadena, California bond, sold by an agent at Walck and Walker Broker Dealer

This question is asking you to identify the type of securities that are exempt from state registration. Securities issued by a U.S. municipality are exempt, as are those securities issued by the government of Canada, its municipalities, or the foreign governments of a country with which the United States maintains diplomatic relations. Stock that trades over- the-counter (OTC) does not qualify for the blue-chip exemption. This exemption applies to securities listed on one of the national exchanges or Nasdaq. All of the following persons are defined in the Uniform Securities Act, EXCEPT: a) Issuer b) Broker-dealer c) Registered representative d) Investment adviser representative - Precise Answer ✔✔c) Registered representative The term registered representative is not defined in the Uniform Securities Act, although it is used in federal law. According to the National Securities Markets Improvement Act (NSMIA), state Administrators are allowed to set: a) Net capital requirements for issuers

b) Net capital requirements for agents of broker-dealers c) minimum financial requirements for investment adviser representatives d) Minimum financial requirements not to exceed those set by the SEC - Precise Answer ✔✔d) Minimum financial requirements not to exceed those set by the SEC Under NSMIA, state securities Administrators are not allowed to impose requirements that are more stringent than SEC regulations According to the NASAA Guidelines Regarding Viatical Investments, purchasers of these securities should meet which of the following financial standards? a) A minimum of net worth of $250, b) A minimum net worth of $150,000 and an annual income of $100, c) The same requirements as accredited investor d) All of the above - Precise Answer ✔✔d) All of the above According to the NASAA Guidelines Regarding Viatical Investments, viaticals are suitable for the following individuals and entities. Individuals who have a minimum net worth of $250,000 regardless of income, choice (a) Individuals who have a minimum net worth of $150,000 and an annual income of at least $100,000, choice (b)

Any individual or organization meeting the standards for accredited investors under Regulation D of the Securities Act of 1933, choice (c) The investor's home equity must be excluded from these net worth calculations. Also, no more than 10% of an individual client s portfolio may be invested in viaticals The owner of a small group of comic book stores is planning a public offering of securities. The owner will be involved in marketing the shares to the public, but will not receive direct compensation from the sales. According to the Uniform Securities Act, the owner must register: a) As an investment adviser b) As an investment adviser representative c) As a broker dealer d) The securities - Precise Answer ✔✔d) The securities The question states that the owner is conducting a public offering of securities. All securities offerings must be registered unless they can qualify for an exemption. There is nothing in the stem to indicate that the offering qualifies for an exemption. The owner is not in the business of providing investment advice for compensation and does not need to register as an investment adviser or an investment adviser representative. The owner also does not meet the definition of a broker-dealer—he is not "in the business of effecting securities transactions." The owner is an issuer and issuers are specifically excluded from the definition of a broker-dealer.

A broker-dealer registered in Georgia sells a security listed on Nasdaq. The transaction takes place in the secondary market between two clients who are Georgia residents. According to the USA, which of the following statements is TRUE? a) The broker dealer would be required to register the security in Georgia b) The security is not required to be registered in Georgia c) The issuer would be required to register the security in Georgia d) The administrator in Georgia may not require any filing - Precise Answer ✔✔b) The security is not required to be registered in Georgia This is an example of an exempt transaction since it is considered a nonissuer transaction executed by a registered broker-dealer where the security is listed on a national securities exchange. Under the Uniform Securities Act, which of the following securities is/are exempt? I. Bonds issued by a Canadian province II. Illinois General Obligation bonds III. An insurance company's common stock IV. Securities issued by a not-for-profit educational association a) II only

b) II and IV only c) I, II, and IV only d) all of the above - Precise Answer ✔✔d) all of the above Members of the North American Securities Administrators Association do NOT include the Administrator from which of the following places? a) Mexico b) Texas and california c) British columbia and Quebec d) The British Virgin Islands - Precise Answer ✔✔d) The British Virgin Islands Members of the North American Securities Administrators Association (NASAA) include Administrators from all 50 U.S. states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, the Canadian Provinces (including British Columbia and Quebec), and Mexico. The Administrator of the British Virgin Islands is not a member. Under the Uniform Securities Act, which of the following issuers are NOT exempt from registration with the state Administrator? a) federal savings and loan associations b) corporations with their stock listed on Nasdaq c) For-profit corporations

d) Not for profit corporations - Precise Answer ✔✔c) For-profit corporations Stock issued by a for-profit corporation is not exempt and is subject to registration. Mandy is an employee of the Indiana Toll Authority. Her boss, a high ranking official with the municipality, asks her to help sell the municipality's revenue bonds to some institutional clients as well as a few retail investors. How is this situation viewed by the USA? a) Many avoids meeting the definition of an agent if she sells the securities only to institutional investors b) Mandy meets the definition of an agent if she sells the securities to any retail investor c) Mandy meets the definit - Precise Answer ✔✔d) Mandy does not meet the definition of an agent under any circumstances Since Mandy is representing an issuer and selling a certain type of exempt security (securities issued by municipalities), she would not meet the definition of agent under any circumstances (whether selling to institutional and/or retail investors) According to the Uniform Securities Act, when does the registration of a financial professional become effective? a) At noon on the 10th day after filing

b) At noon on the 20th day after filing c) At noon on the 30th day after filing d) At midnight on the 30th day after filing - Precise Answer ✔✔c) At noon on the 30th day after filing Assuming an applicant has submitted all required documentation, its registration becomes effective at noon on the 30th day after filing with the state. The Administrator does have the power to grant an earlier effective date, and may defer the effective date until the 30th day after the filing of any amendment to the initial application. A client may bring civil action if: I. An agent is not registered II. An offer is made but no sale occurs III. Misleading statements are made and the client relies on those statements to make a purchase IV. Client securities are commingled with other client securities a) I and III only b) II and IV only c) I, II, III only d) all of the above - Precise Answer ✔✔a) I and III only This question is a detailed one. Any individual may sue in the civil courts, but civil liability is limited to monetary damages. In choice (II),

an offer is made, but no sale occurs, so damages cannot exist. Therefore, a client could not sue in civil court for damages. An Administrator has jurisdiction over the offer, and could still act. Under state securities law, the broker-dealer and the agent must be registered in all the states in which the agent transacts business. If an agent makes misleading statements and a client purchases a security, the client could sue for damages on the grounds that he was misled. Broker- dealers may commingle client securities, but not client and broker-dealer securities. An administrator who requires the posting of a bond may: I. accept cash II. Accept securities III. use discretion as to whether the type of securities and the amount of the deposit are appropriate IV. use discretion whether to accept a deposit of cash or securities instead of a bond a) I only b) I, II, and III only c) I, II and IV only d) all of the above - Precise Answer ✔✔b) I, II and III only The state Administrator may accept a deposit of cash or securities in lieu of a bond. The Administrator may determine the type of securities

acceptable for deposit but may not altogether disallow deposits of securities in lieu of a bond. A broker-dealer is participating in an initial public offering of a security that will be listed on Nasdaq. Which of the following documents is the broker-dealer required to deliver to a client who purchases the securities in the aftermarket immediately after the completion of the offering? a) there's no requirement for additional documentation b) research report c) final prospectus d) a list of all the broker dealers involved in the offering. - Precise Answer ✔✔c) final prospectus A client who purchases securities as part of an offering must receive either a final prospectus or a preliminary prospectus along with an additional document from the broker-dealer that executes the transaction. The final prospectus must be provided for a certain period after the completion of the offering (i.e., in the aftermarket). For an IPO, if the securities will be immediately listed on the NYSE or Nasdaq, the aftermarket prospectus requirement lasts for 25 days. For an IPO of a security that will be quoted in an over-the-counter market (e.g., on the Pink Open Market), the prospectus delivery requirement lasts for 90 days; however, it only lasts for 40 days for a subsequent (follow-on) offering of these securities. An administrator can issue a cease and desist order under which of the following conditions?

a) only if a person has engaged in an act which violates the USA b) if the person is about to engage in any act which violates the USA c) if the administrator sends notification to the person in advance of taking action d) only if the person is a supervising agent or IAR - Precise Answer ✔✔b) if the person is about to engage in any act which violates the USA Administrators can authorize a cease-and-desist order if they believe a violation of the USA is about to occur or if the USA has already been violated. They can take this action with or without a prior hearing and therefore they're not required to send prior or advance notice to the person An insurance agent works in an office building down the hall from a broker-dealer. They are not affiliated. What compensation may the agent receive from the broker dealer in exchange for referrals? a) discounted commission b) insurance referrals c) commissions d) 12b-1 fees - Precise Answer ✔✔b) insurance referrals All of the following statements are TRUE. regarding the preparation and maintenance of records by investment advisers and broker dealer EXCEPT

a) The administrator may determine that the records prepared by investment advisers and broker dealer may be different b) all records must be preserved for a period determined by the administrator c) Correcting amendments must be filed promptly if information in a document previously filed become inaccurate d) only an administrator within the same state - Precise Answer ✔✔d) only an administrator within the same state may examine the records of an investment adviser or broker dealer An Administrator may inspect the records of a broker-dealer or investment adviser located within or outside the state. All of the other statements regarding recordkeeping are correct. Which of the following statements is TRUE concerning the posting of bonds by a broker-dealer? a) The bond may be waived if the broker dealer has been in business for at least 10 years b) There is no bond requirement if the broker-dealer is registered in another state c) There is not bond requirement if the broker-dealer does not have custody or discretionary authority d) The administrator may not waive the bond requirement for any broker-dealer - Precise Answer ✔✔c) There is no bond requirement if the broker-dealer does not have custody or discretionary authority

Not every broker-dealer maintains custody of client assets. Some, for example, employ clearing firms to take care of this responsibility. The Administrator may require broker-dealers to post bonds if they have custody of, or discretionary authority over, client funds or securities. The bond is waived if the broker-dealer's net capital exceeds a specified amount. The Administrator may determine this amount. Under the USA, which of the following statements BEST describes the term inspectorial powers? a) The state administrator's power to delegate responsibility to a self- regulatory organization b) The state administrator's power to have special investigators review the records of registered investment advisers c) the state administrator's power to apple the stop-order test d) The state administrator's power to subpoena records within and outside the state - Precise Answer ✔✔d) The state administrator's power to subpoena records within and outside the state Inspectorial powers refers to the right of the State Administrator to inspect or review any records, both within and outside the state, in order to carry out the provisions of the Uniform Securities Act. An agent recommends that a client purchase a particular security. The agent believes the client has the resources to pay for the transaction. Three days after the trade is executed the client indicates that he cannot

meet his financial obligation to the brokerage firm. If the agent lends personal funds to the client: a) The agent will be committing fraud b) The agent will be acting in an unethical manner c) The client forgoes a right to be offered a letter of rescission d) The client must pay a - Precise Answer ✔✔b) The agent will be acting in an unethical manner This is unethical behavior, not fraud. An agent should not borrow or lend funds to a client. An agent tells his supervisor that 12 years ago, a company that the agent founded had to declare bankruptcy. The agent just discovered that the county has recently imposed a tax lien on rental property that he is refinancing. The agent is disputing the assessment. Which of the following issues is the agent required to disclose? a) tax lien b) the bankruptcy c) The refinancing d) The agent is not required to disclose any issues - Precise Answer ✔✔a) Tax lien Registered personnel must disclose all unsatisfied judgments and tax liens on Form U4 within 30 days. (FINRA has fined and temporarily

suspended persons for failing to make these disclosures promptly.) The bankruptcy is not required to be disclosed since it occurred more than 10 years ago. A customer of a broker-dealer has purchased stock in a margin account. The customer's exposure in the account is 50%. If the stock falls by 10%, what's the customer's percentage of loss in the account? a) 10% b) 50% c) 5% d) 20% - Precise Answer ✔✔d) 20% If a customer has 50% exposure in a margin account, it means they've only paid for 50% of an investment and borrowed the other 50%. When a customer has 50% exposure, the easiest way to determine the client's percentage loss due to the decline in the stock's value is to double the percentage of decline. In this question, since the stock declined by 10%, the customer has a resulting loss of 20% (i.e., 2 x 10% = 20%) Under the Uniform Securities Act, a state Administrator may NOT: a) conduct investigations involving broker-dealers domiciled in other states b) conduct an investigation without proof of wrongdoing

c) enjoin an investment adviser from participating in the securities business d) issue subpoenas to individuals outside the state - Precise Answer ✔✔c) Enjoin an investment adviser from participating in the securities business A court has the power to enjoin (prohibit) an investment adviser from participation in the securities business, but the state Administrator does not. An agent inadvertently sold an unregistered, nonexempt security to a client. Under the Uniform Securities Act, which of the following actions may be taken? I. Getting the security registered as soon as possible II. Buying the security back from the customer III. Paying the customer the maximum legal rate of interest, less dividend or interest income received from the date of purchase a) I and II b) I and III c) II and III d) all of the above - Precise Answer ✔✔c) II and III

An issuer of a closed-end fund decided to cover the sales fee for a follow-on offering of shares of its fund. How would the broker-dealer classify the security? a) load b) half load c) no load d) full load - Precise Answer ✔✔c) no load Like open-end funds (i.e., mutual funds), closed-end funds are regulated investment companies. Investment companies that don't charge a front- end or back-end load are referred to as "no-load" funds. Mutual funds are considered no-load if they don't have a front-end load, contingent deferred sales charge, or a 12b-1 fee that exceeds .25%. Closed-end funds are also considered no-load if they don't have underwriting fees, commissions, or other offering expenses. Under the USA, which of the following transactions would NOT be considered exempt? a) an offer to an investment company b) a transaction by an executor of an estate c) an unsolicited issuer transaction effected through a registered broker- dealer d) a transaction by a trustee that is involved in a bankruptcy proceeding - Precise Answer ✔✔c) an unsolicited issuer transaction effected through a registered broker-dealer

Under the Uniform Securities Act, any offer to an investment company or other institutional investor, a transaction by an executor of an estate, or a trustee involved in a bankruptcy, would be defined as an exempt transaction. An unsolicited nonissuer transaction may qualify as an exempted transaction. Which of the following choices is considered a fraudulent act? a) withholding any fact about an issuer in discussions with clients b) omitting a fact that is relevant to making an investment decision c) misstating a fact about an issuer in a discussion with a client d) Neglecting to obtain relevant information about an investor - Precise Answer ✔✔b) omitting a fact that is relevant to making an investment decision In order to effect a private securities transaction, an agent of a broker- dealer: a) only needs to be registered in the state in which an investor lives b) cannot receive compensation for the transaction c) must receive permission from his broker dealer to effect the transaction d) must receive permission from the state administrator - Precise Answer ✔✔c) must receive permission from his broker dealer to effect the transaction

In order to effect private securities transactions, agents need to disclose the transaction to their broker-dealer. If an agent is receiving compensation for the transaction, the broker-dealer must approve the private securities transaction as well. Failure to disclose or if necessary, receive permission, is a violation that's referred to as "selling away." A broker-dealer employs several agents who conduct business on the premises of a federally chartered bank. The broker-dealer just fired one of these agents. The broker-dealer also suspects that the agent may have falsified client records. Under the NASAA Model Rules for Sales of Securities at Financial Institutions, the broker-dealer must: a) retain counsel promptly b) notify the bank promptly c) notify the state attorney's office d) submit the matter to mandatory mediation - Precise Answer ✔✔b) notify the bank promptly The agent described in the question was terminated for cause. The broker-dealer must notify the bank promptly about the agent's termination. A broker-dealer located in State A, in business for three years, goes out of business in July. Some of the principals at the firm start a new broker- dealer in August of that year. Which of the following statements is TRUE concerning the broker-dealer's registration fee?

a) A fee is not required until the next year b) the appropriate registration fee must be paid c) a prorated fee must be paid d) a fee is not required since the broker-dealer and not the agent is seeking registration - Precise Answer ✔✔b) the appropriate registration fee must be paid Every applicant whether an agent, broker-dealer, investment adviser, or investment adviser representative must pay a registration fee. This fee is paid when an applicant files the initial application as well as when the license expires each year on December 31. If a registration fee is paid in the middle of the year, the fee is usually not prorated. A broker-dealer is registering a new issue with the Administrator of State A. What information must be sent to the Administrator? I. The number of shares II. The articles of incorporation III. The financials IV. the tax identification number filed with the IRS a) I only b) II and III c) I, II, and III

d) I, II, III, and IV - Precise Answer ✔✔c) I, II, and III This is an example of the detailed nature of the examination. You are expected to know that the number of shares, the issuer's financial information, and Articles of Incorporation (the charter) generally are all required by the states. A tax identification number is not required by the Administrator. Registration by coordination is used in conjunction with which of the following Acts? a) the securities act of 1933 b) the securities exchange act of 1934 c) the investment company act of 1940 d) the investment advisers act of 1940 - Precise Answer ✔✔d) the investment advisers act of 1940 An issuer that uses registration by coordination must also register the same offering with the SEC under the Securities Act of 1933 Which TWO forms must an agent obtain from a client in order to purchase securities in a margin account? I. signed hypothecation agreement II. signed loan consent agreement

III. signed credit agreement IV. signed new account form a) I and III b) I and IV c) II and III d) II and IV - Precise Answer ✔✔a) I and III An agent of a broker-dealer must obtain from a client written authorization to open a margin account at a broker-dealer. It is considered an unethical business practice for an agent to allow a client to execute transactions in a margin account without the client's written authorization. The client would sign a document referred to as a margin agreement, which would include an hypothecation agreement and a credit agreement. A loan consent agreement is not mandatory. Clients are not required to sign new account forms. A company is conducting an IPO. Its shares will be listed on Nasdaq. For how long does a broker-dealer that is part of the selling group need to make the prospectus available to investors? a) 40 days b) 90 days c) 10 days d) 25 days - Precise Answer ✔✔d) 25 days

All investors who purchase new issues must receive prospectuses, which may be made available electronically. This obligation to provide a prospectus continues for 25 days after the effective date if a company is conducting an IPO and its securities will be listed on a national exchange (e.g., the NYSE or Nasdaq), which is the situation described in the question. If a company is conducting an IPO and its shares are not eligible for listing on an exchange, the prospectus requirement lasts for 90 days. A Canadian broker-dealer has many clients who vacation frequently in the US. In order to continue doing business with these customers while they are in the US, the broker-dealer must file all the following material with the administrator, EXCEPT: a) consent to service of process b) form B/D c) copy of current registration filed in Canada d) Proof of membership in a self-regulatory organization - Precise Answer ✔✔b) form B/D According to the Uniform Securities Act, the broker-dealer must be registered properly in Canada and must file the following documents with the Administrator: a Consent to Service of Process, a copy of the registration document filed with its Canadian regulator at the provincial level, and proof that it is regulated by a self-regulatory entity, such as an exchange.

The Canadian broker-dealer may act only in a limited capacity in the states. Generally, it must restrict its activities to existing clients temporarily in the state and to certain institutions When a security is sold under an exemption from registration under the USA, the burden of proof for establishing the exemption is on the: a) administrator b) person claiming the exemption c) SEC d) Purchaser - Precise Answer ✔✔b) person claiming the exemption The person claiming the exemption has the burden of proof for the exemption An agent selling investment products on the premises of a bank should always: a) disclose to clients that these products are not FDIC-insured b) explain the difference between the FDIC and SIPC c) collect signed waivers of compliance from clients d) disclose to clients that she is an employee of the broker-dealer and not an employee of the bank - Precise Answer ✔✔a) disclose to clients that these products are not FDIC-insured

An agent selling investment products on the premises of a bank must always disclose that these products are NOT FDIC-insured, that they are not bank deposits or guaranteed by the bank, and that they are subject to investment risks, including the loss of principal. Which of the following investors are considered accredited under Regulation D of the Securities Act of 1933? I. A portfolio manager at a mutual fund company II. Banks III. Any senior officer of a publicly traded company IV. individuals with a net worth of $1 million or more a) I and II b) II and IV c) III d) I, III, and IV - Precise Answer ✔✔b) II and IV Institutions, such as banks, are specified in the regulation. A person who meets the financial test of either annual income of $200,000, or a net worth of $1 million, is also considered accredited. When is an agent's uniform registration form (Form U4) require to be updated