Free NASAA Series 63 (Uniform Securities Agent State Law Examination) Regulation of Agents of Broker-Dealers Practice Questions
Regulation of agents of broker-dealers on the NASAA Series 63 exam covers agent registration requirements, termination procedures, compensation limitations, and prohibited practices under state securities law.
Sample Questions
Question 1
Easy
An agent's registration with the Administrator becomes effective at what time?
Solution
D is correct. Under the Uniform Securities Act, an application for registration (including that of an agent) becomes effective at noon of the 30th day after a complete application has been filed, provided no denial order is in effect and no proceeding is pending.
Question 2
Medium
An individual representing an issuer wants to know when she must register as an agent under the Uniform Securities Act. In which of the following situations is she required to register?
Solution
A is correct. The Uniform Securities Act excludes individuals representing an issuer from the definition of agent only in narrow circumstances: transactions in certain exempt securities (federal, municipal, and similar government issues, federally chartered banks and credit unions, qualifying commercial paper, and investment company securities), exempt transactions, and transactions limited to existing employees, partners, or directors of the issuer when no commission is paid. A non-issuer transaction in non-exempt securities with retail investors for compensation does not fit any exclusion, so registration as an agent is required.
Question 3
Hard
A registered agent receives a felony conviction for a non-securities-related offense — specifically, aggravated assault. Under the Uniform Securities Act, which of the following statements BEST describes the agent's obligation and the Administrator's authority?
Solution
Choice D is correct because Form U4 requires disclosure of all felony convictions, regardless of whether they are securities-related. The Uniform Securities Act grants the Administrator broad authority to deny, suspend, revoke, or condition an agent's registration based on a felony conviction — including non-securities felonies — when the Administrator determines the applicant or registrant is not qualified or trustworthy. The agent has an affirmative duty to file a prompt amendment to Form U4.