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FINRA Series63 Exam Syllabus Topics:
| Section | Weight | Objectives |
|---|---|---|
| Regulation of Broker-Dealer Agents | 13% | - Associated person regulations - Agent registration requirements |
| Ethical Practices and Obligations | 25% | - Conflicts of interest and fiduciary duties - Fraudulent and unethical conduct |
| Regulation of Broker-Dealers | 12% | - Broker-dealer regulatory requirements - Federal and state registration standards |
| Regulation of Investment Adviser Representatives | 5% | - Recordkeeping and contract standards - IAR registration and obligations |
| Regulations of Securities and Issuers | 9% | - Securities registration and exemptions - Issuer regulation principles |
| Communication with Customers and Prospects | 20% | - Disclosure requirements - Advertising and correspondence rules |
| Remedies and Administrative Provisions | 9% | - Enforcement and penalties - State Administrator authority |
| Regulation of Investment Advisers | 5% | - Investment adviser registration rules - Federal vs state adviser regulation |
FINRA Uniform Securities Agent State Law Examination Sample Questions:
Which of the following laws deals with identity theft protection?
- A. the USA Patriot Act
- B. ERISA
- C. Regulation S-P
- D. the Bank Secrecy Act (BSA)
Correct Answer: C 🗳️
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Which of the following would not appear on a trade confirmation?
- A. the commission
- B. the settlement date
- C. All of the above items appear on a trade confirmation.
- D. the client's account number
Correct Answer: C 🗳️
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o: 52
Which of the following statements regarding "registration by qualification" is true?
- A. Registration by qualification is the preferred method used by issuers since it requires the least amount of paperwork.
- B. Registration by qualification refers to the fact that certain categories of securities are exempt from state registration requirements.
- C. In its simplest form, registration by qualification requires the issuer to supply voluminous amounts of information about both the firm and its directors, officers, and major shareholders.
- D. Registration by qualification refers to the fact that the highest quality bonds, i.e., those with a AAA rating, are exempt from registration with the state.
Correct Answer: C 🗳️
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Which of the following would not be a prohibited activity for a broker-dealer?
I. A broker-dealer tells a client that a municipal revenue bond offered by the city of Boston, Massachusetts is almost risk-free because it is backed by the taxes paid to the city, and the city generates a lot of tax dollars.
II. A broker-dealer sells a client some bonds that the broker-dealer has in its portfolio, after informing the client that it is acting as a seller in the transaction.
III. A broker-dealer purchases some stock that a client is selling for its own portfolio, after informing the client that it is acting as a buyer in the transaction.
IV. A broker-dealer purchases 1,000 shares of Southwest Airlines for a client who calls and asks the broker-dealer to buy some shares of a domestic airline stock at a good price for him and receives written discretionary authority from the client two days later, prior to the settlement date.
- A. I and IV only
- B. II, III and IV only
- C. II and III only
- D. I only
Correct Answer: C 🗳️
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Broker-Dealer Wheeler has no offices in the state. Wheeler does, however, sell corporate bonds from his portfolio to banks and insurance companies located in the state that purchase the bonds for their investment portfolios. He executes about twelve of these transactions a year. Wheeler profits from the price appreciation of the bonds during the time he held them, but receives no other form of compensation. Based on these facts,
- A. Wheeler must register as a broker-dealer in the state, and the securities must also be registered before they can be sold to in-state investors.
- B. Wheeler must register as a broker-dealer in the state, but the securities do not need to be registered.
- C. Wheeler need not register in the state, and the securities are also exempt from registration.
- D. Wheeler need not register in the state, but the securities must be registered before they can be sold to in-state investors.
Correct Answer: C 🗳️
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