FINRA Uniform Securities State Law Examination Series 63 Exam Questions in PDF

Free FINRA Series 63 Dumps Questions (page: 1)

The Uniform Securities Act (USA) is

  1. a body of laws governing the purchase and sale of securities within a single state.
  2. a set of guidelines for individual states to follow when formulating their own securities’ laws.
  3. a group of laws requiring state-issued securities, such as municipal bonds, to be registered with.
  4. federal legislation that requires all states to adopt the same registration requirements for all.

Answer(s): B

Explanation:

The Uniform Securities Act (USA) provides a model for states to follow when formulating their own securities laws. It does not, itself, contain any laws.



Once you have passed the Series 63 examination, which entity must then approve your application to sell securities?

  1. FINRA
  2. NASAA
  3. SEC
  4. the state administrator

Answer(s): D

Explanation:

Once you have passed the Series 63 exam, it is the state administrator who can approve or deny your registration. NASAA developed the Uniform Securities Agent State Law Examination and FINRA administers it. The SEC is not a party to the state registration process.



Which of the following securities would not necessarily be exempt from state registration?

  1. a stock listed on the Tokyo Stock Exchange
  2. a bond guaranteed by the Canadian government
  3. a bond issued by another state’s employees’ credit union
  4. a stock listed as a NASDAQ National Market Issue.

Answer(s): A

Explanation:

Stocks listed on the Tokyo Stock Exchange would not necessarily be exempt from state registration. Stocks that are registered with the SEC, such as NASDAQ National Market Issue stocks, securities issued or guaranteed by the Canadian government, and securities issued or guaranteed by banks or credit unions are all exempt.



Moe is a registered investment adviser doing business under the name of MoeMoney Investment Advisers,

LLC. Larry, Curly, and Mary all hold positions with the firm. Larry is on the board of directors; Mary is a sales representative for the firm; and Curly is an administrative assistant, who performs clerical duties.

Given that Moe is already a registered investment adviser, which of the other three are automatically registered as investment adviser representatives?

  1. Larry only
  2. Larry and Mary only
  3. Larry, Mary and Curly
  4. Mary and Curly only

Answer(s): A

Explanation:

As a director of the firm, Larry would automatically be registered as an investment adviser representative of MoeMoney Investment Advisers. Although directors and officers of the firm are automatically registered as investment adviser representatives, Mary, as a sales representative, would have to apply for her own registration. Curly does not need to be registered since he performs only clerical duties.



Jack is employed by NewCorp, which is engaging in an initial public offering (IPO). Jack will need to register as a sales representative if he:

  1. engages in transactions with the underwriters of the IPO for the purpose of taking the firm public.
  2. represents NewCorp in any transactions with financial institutions.
  3. participates in the selling of the new stock to individual investors.
  4. Jack will need to register as a sales representative if he performs any one of the above activities.

Answer(s): C

Explanation:

Jack will need to register as a sales representative if he participates in the sale of new stock to individual investors. Those who deal directly with the public need to register as sales representatives under the Uniform Securities Act. If Jack limits his involvement to transactions with the underwriters or financial institutions, he need not register.



Blue Sky Laws are designed to:

  1. protect investors from fraud in their securities market transactions.
  2. protect agents, broker-dealers, and investment advisers and their representatives from spurious allegations of fraudulent activity.
  3. enhance the tourism industry within a state.
  4. favor investment in companies that engage in environmentally friendly practices.

Answer(s): A

Explanation:

The main purpose of Blue Sky Laws is to protect individual investors from fraud in their securities market transactions. Requiring the registration of new security issues and the registration of those persons who advise individual investors as well as those involved in the purchase and sale of securities to the public are just some of the regulations designed to do this. There are no provisions designed to protect agents, broker-dealers, or investment advisers and their representatives in any regard.



An individual who represents a broker-dealer in the buying and selling of securities is called a(n):

  1. underwriter
  2. issuer
  3. agent
  4. administrator

Answer(s): C

Explanation:

An individual who represents a broker-dealer in buying and selling securities is called an agent or a registered representative. An agent may also work for an issuer, which refers to the entity that is selling securities to raise money for itself. An underwriter is the entity that aids the issuer in bringing the new securities to market. Administrator is the title many states use to refer to the official in charge of enforcing the state’s securities regulations.



Which of the following statements best explains the difference between an agent and a broker-dealer?

  1. An agent is an individual who represents a broker-dealer or an issuer and buys and sells securities he does not own in return for a commission on the transactions he executes. A broker-dealer may also buy and sell securities for his own portfolio, in which case the broker-dealer enjoys any price appreciation on those securities.
  2. A broker-dealer must be licensed in the state in which he conducts business, but there are no separate licensing requirements for agents.
  3. Agents are engaged exclusively in the purchase and sale of stocks whereas broker-dealers also buy and sell bonds and option contracts.
  4. Agents conduct their business exclusively in the secondary market, while broker-dealers also operate in the primary market.

Answer(s): A

Explanation:

The main difference between an agent and a broker-dealer is that an agent represents either a broker-dealer or an issuer and buys and sells securities he doesn’t own, receiving a commission for the trades he executes. A broker-dealer, when functioning as a dealer, is buying and selling for his own portfolio, thereby profiting from any price appreciation in the assets in his portfolio. Both agents and broker-dealers must meet state licensing requirements; both engage in the purchase and sale of stocks, bonds, and option contracts; and both operate in both the primary and secondary markets.



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