FINRA Series-63 - Uniform Securities State Law Examination Exam

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Total 251 questions

A broker-dealer cannot legally be

  • A. a partnership.
  • B. an individual.
  • C. a sole-proprietorship.
  • D. A broker-dealer can be any of the above.


Answer : D

Explanation:
A broker-dealer can be a partnership, an individual, or a sole-proprietorship under the guidelines of the Uniform Security Act.

Which of the following does not describe a prohibited practice for broker-dealers under the
NASAA Model Rules?
I. SecureMoney Broker-Dealers has received a request from a client who wants
SecureMoney to identify a few solid firms in the Asian market and invest up to $20,000 in them. SecureMoney executes the purchases and receives the requisite signed discretionary authorization from the client before the settlement date.
II. CanDo Broker-Dealers executes a margin transaction for a client, promptly receiving a signed, written margin agreement from the client after the transaction takes place.
III. GetErDone Broker-Dealers receives a call from a client who wants to purchase some securities on margin. GetErDone has the client come into the office to sign a properly executed margin agreement prior to effecting the transaction.

  • A. None of the selections are prohibited practices.
  • B. I and III only
  • C. II and III only
  • D. III only


Answer : C

Explanation:
Neither Selection II nor Selection III describes a prohibited practice for broker-dealers under the NASAA Model Rules. Broker-dealers are permitted to execute margin transactions for clients as long as they receive a signed, written margin agreement promptly after the initial margin transaction takes place. The agreement need not be signed beforehand. Discretionary authorizations do need to be signed before the broker-dealer executes any discretionary transactions for a client, so Selection I describes a prohibited practice.

Which of the following would not fall under the classification of “institutional investor”?

  • A. Prudential Insurance
  • B. Chase Bank
  • C. Neuring Investment Advisers
  • D. Franklin Templeton Mutual Funds


Answer : C

Explanation:
Nuering Investment Advisers would not fall under the classification of institutional investor. Institutional investors are defined as banks, insurance companies, mutual funds, some pension plans, and broker-dealers registered under the Securities Exchange Act of
1934. Investment advisers are not part of this group.

Assuming there is not a stop order or a proceeding pending, under the registration by coordination process a securitys registration with the state becomes effective:

  • A. only when it is approved by the state Administrator, regardless of whether it has been approved by the SEC.
  • B. immediately after approval by the SEC as long as the registration statement has been on file for at least 20 days or the Uniform Securities Act has provided an exemption to this waiting period.
  • C. immediately subsequent to approval by the SEC, regardless of how long the registration statement has been on file.
  • D. only when it is approved by the state Administrator, who will review the registration documentation upon notification that SEC approval has been granted.


Answer : B

Explanation:
Under the registration by coordination process, the securitys registration with the state becomes effective immediately after approval by the SEC as long as the registration has been on file for at least 20 days or the Uniform Securities Act has provided an exemption to this waiting period. This assumes, of course, that there is not a stop order or a proceeding pending.

Until yesterday Maddie was a registered agent employed by the broker-dealer, QuikDeals.
Yesterday afternoon, issues that had been brewing between her and another employee of the firm came to a head, and Maddie impulsively quit her job.
At this point,

  • A. Maddie has thirty days to find a job with another broker-dealer, or she will need to file a new registration application.
  • B. Maddie has sixty days to find a job with another broker-dealer, or she will need to file a new registration application.
  • C. Maddie will have to file a new application for registration with the Administrator upon finding employment with another broker-dealer since she is no longer considered to be a registered agent by the state.
  • D. Maddie is required to call all of her clients at QuikDeals to inform them she is no longer employed there.


Answer : C

Explanation:
When Maddie quit her job, her status as a state-registered securities agent was automatically terminated, and she will need to file a new application for registration with the
Administrator upon obtaining a position with another broker-dealer. If she does so within thirty days, her registration will become effective as soon as she has filed her application and paid her application fee. While she is required to notify the Administrator that she has terminated her employment with QuikDeals, there is no requirement that she contact any of her clients at QuikDeals.

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Total 251 questions