Free NASAA Series 63 (Uniform Securities Agent State Law Examination) Regulation of Broker-Dealers Practice Questions
Regulation of broker-dealers on the NASAA Series 63 exam covers state registration, exemptions, minimum financial requirements, recordkeeping obligations, and supervision of agents.
Sample Questions
Question 1
Easy
Under the Uniform Securities Act, a broker-dealer's registration in a state generally:
Solution
B is correct. Under the Uniform Securities Act, registration of a broker-dealer (as well as agents and investment advisers) expires on December 31 of each year and must be renewed annually by paying the renewal fee and filing any required materials. Registration becomes effective at noon of the 30th day after filing a complete application (absent Administrator action).
Question 2
Medium
Under the Uniform Securities Act and the NASAA model supervision rules, a broker-dealer satisfies its supervisory obligations by doing all of the following EXCEPT:
Solution
C is correct. Adequate supervision requires written supervisory procedures, a designated qualified principal, correspondence and account review, and periodic internal inspections. Letting agents review and approve their own new accounts and exception reports defeats independent oversight and is inconsistent with the firm's supervisory duty.
Question 3
Hard
Northgate Securities is registered only in State A, where its single office is located. Under the Uniform Securities Act, all of the following circumstances would obligate Northgate to register as a broker-dealer in another state EXCEPT:
Solution
B is correct. Opening a staffed branch office, soliciting new resident retail clients, and establishing a place of business each create a presence or directed activity that requires registration in the relevant state. Executing a trade for an existing client who is merely vacationing temporarily in another state, where Northgate has no place of business, falls within the de minimis/snowbird exclusion and does not by itself require registration there.