Free Practice Questions for FINRA Series-63 Exam

If, as a registered agent with a broker-dealer, you receive an order from a client that you don’t believe is in her best interests, you should tell her that, but you must still execute the transactions if she insists. You may not legally ignore her instructions, nor should you bother either the mutual fund or your supervisor with this, given the facts as provided; you should deal with it yourself.

If your client places an order to purchase 500 shares of Oracle on the open market on Wednesday, September 15th, payment will be due on Monday, September 20th. The settlement date for stock transactions is T + 3, which means the third business day after the trade. Saturday is not a business day.

The National Securities Markets Improvement Act of 1996 defined “federal covered securities” and exempted them from state registration requirements. The Gramm-Leach-Bliley Act focused on financial institutions and provided for their registration as broker-dealers under certain conditions. The National Conference of Commissioners on Uniform State Laws (NCCUSL) is the organization that drafted the Uniform Securities Act, which is not comprised of actual laws itself, but is, instead, just a guideline for each state to use when formulating its own securities laws.

Agents, investment advisers, investment adviser representatives, and broker-dealers must all sign a consent to service of process, allowing the Administrator to receive legal documents in their stead. The consent to service of process must accompany the application for registration with the state or the documentation provided with a notice filing when permitted.

The administrator of a state would not have jurisdiction in the scenarios described in Selections I and II. In Selection I, more than 2/3 of the circulation of the newspaper is outside the state, which excludes it from the jurisdiction of the Administrator. Selection II describes an electronic communication that originates from outside the state, which excludes it. Selection III constitutes an offer to sell securities within the state, and this will always fall under the jurisdiction of the Administrator of the state.

The Administrator of a state can deny an application if the application is missing information, if the registrant has been enjoined from engaging in activities involving securities in another state, or if the Administrator determines the applicant is not financially solvent.

Selections II, III, and IV are correct. When Foo Lish begins serving as a custodian of its clients’ assets, it must file an updated Form ADV with the Administrator, meet higher net capital requirements than before, and pay a CPA to do an annual unannounced audit of the firm. The U-5 form is filed when a representative leaves the firm.

An investment adviser may not recommend a stock to the client that the adviser holds without disclosing to the client that it owns the stock. They are permitted to also be registered as a broker-dealer in the state and to accept certain types of soft dollars as compensation from brokers. And they can have positions in securities that their clients have positions in-just as long as this is disclosed.

Lending money to clients for them to invest is not a prohibited practice. This is otherwise known as a margin transaction.

A-2-Z can only sell a client TIPS from its own portfolio if it informs the client that it is acting as the seller in this transaction and receives the client’s written consent before the settlement date of the transaction.