Free NASAA Series 63 (Uniform Securities Agent State Law Examination) Regulation of Securities and Issuers Practice Questions
Regulation of securities and issuers on the NASAA Series 63 exam covers registration by coordination, qualification, and filing, as well as exempt securities, exempt transactions, and the registration process for securities offerings.
Sample Questions
Question 1
Easy
The antifraud provisions of the Uniform Securities Act apply to which of the following?
Solution
A is correct. The antifraud provisions of the Uniform Securities Act apply to any offer or sale of a security in the state, regardless of whether the security is registered, exempt, or federal covered, and regardless of whether the transaction is exempt. Registration exemptions never exempt an issuer, agent, or broker-dealer from antifraud liability.
Question 2
Medium
All of the following are exempt transactions under the Uniform Securities Act EXCEPT:
Solution
D is correct. Exempt transactions under the Act include unsolicited customer orders, fiduciary sales such as those by a trustee in bankruptcy, and transactions with institutional buyers like insurance companies. A solicited public offering of new shares to retail investors is a primary distribution by the issuer; it is the very activity state registration is designed to cover and therefore is not an exempt transaction.
Question 3
Hard
Under the Uniform Securities Act, all of the following are exempt securities that may be sold in a state without registration EXCEPT:
Solution
C is correct. The USA grants an exempt-security status to insurance company securities only when the issuing insurer is organized under the laws of the United States and is authorized to do business in the state where the securities are offered. An insurer that has not been admitted to transact business in that state fails the statutory condition, so its stock does not qualify for the insurance-company exemption and would require registration absent some other basis. The remaining instruments satisfy their respective exemptions: municipal securities are exempt whether issued in-state or out-of-state, securities of banks are exempt, and securities of a foreign sovereign with which the United States maintains diplomatic relations are exempt.