STC Series 66 Chapter 3 Test exam
questions and answers
Fred works for Lasker Securities and is holding an investment
seminar in Connecticut. Fred has sent 100 invitations to people
located in New York. Since his firm has no place of business in New
York, he has the responses returned to his office in Connecticut.
Which TWO of the following statements are TRUE?
Lasker Securities would not need to be registered as a broker-dealer
in New York if it has no place of business in New York, and the
seminar is to be held in Connecticut.
Lasker Securities would need to be registered as a broker-dealer in
New York, since it is conducting business in the state.
Fred would need to register in the state of New York as an agent,
since he is doing business within the state.
Fred would not need to be registered as an agent in New York, but
must be registered in Connecticut, since the seminar will take place
in Connecticut. - answer II and III
Lasker is conducting business in the state of New York if its agents
solicit securities business within that state, even though the broker-
dealer has no place of business within the state. Sending invitations
to attend an investment seminar is considered doing business. Fred
must be registered as an agent in both states since he is acting on
behalf of the broker-dealer in the solicitation of securities business
in New York, and conducting an investment seminar in Connecticut.
Which of the following statements is TRUE concerning the posting of
a bond by a broker-dealer? - answer There is no bond requirement
if the broker-dealer does not have custody or discretionary
authority over client funds or securities
The Administrator may require broker-dealers to post bonds if they
have custody of or discretionary authority over client funds or
securities. The bond may be waived if the broker-dealer's net capital
exceeds a specified amount. The Administrator may determine this
amount.
,A soon-to-be-registered agent may take which of the following
actions?
Accept unsolicited orders
Invite prospective clients to seminars
Provide research reports to other agents for use with their clients
Cold-call potential clients and provide quotes - answer II and III
only
A broker-dealer may not allow an unregistered individual to act as
an agent unless the agent is exempt. The soon-to-be-registered
agent in this scenario may not accept orders, solicited or
unsolicited, be compensated based on sales, or cold-call clients.
Inviting clients to seminars and providing research to other agents
are not considered activities associated with an agent.
What form is required when registering as a broker-dealer? - answer
Form BD
Form BD is the Uniform Application for Broker-Dealer Registration,
which is filed with the SEC, SROs that have jurisdiction, and the
appropriate states, through the Central Registration Depository
(CRD) operated by FINRA.
A firm that is expecting to take its shares public has recently hired a
new employee to assist in selling shares to investors. According to
the Uniform Securities Act, which of the following statements is
TRUE? - answer The employee would be required to register in any
state in which he solicits investors
In this question, the employee is considered an agent of the issuer.
Since the stock is going to be sold publicly, the shares are required
to be registered along with the employees of the issuer selling
them. There are situations in which employees may be exempt from
registration (e.g., engaged in exempt transactions) however,
registration is generally required if shares are being sold to the
public. (
, To cut costs, a broker-dealer hires some college interns. The firm
allows the interns to make calls to potential clients to market
investment opportunities in stocks, bonds, and mutual funds. This
action would be: - answer Acceptable if the interns are registered
Since the interns are attempting to effect transactions, they must
be registered. There is no requirement that an agent of a broker-
dealer have a college degree. If they are properly registered, any
employees of a broker-dealer may solicit securities transactions.
An agent of a broker-dealer has written an electronic marketing
piece that recommends the purchase of a new investment company
which is being offered by his firm. He wants to send it by e-mail to
40 non-institutional clients. If the product is suitable for each client
who's on the agent's distribution list, which of the following
statements is TRUE? - answer The content of the e-mail is not
required to be filed with the Administrator because the securities
are federal covered.
Advertisements, including standardized emails, are generally
required to be filed with the state Administrator before they're
used. However, advertisements for exempt securities and securities
that are sold in exempt transactions are not required to be filed.
Since registered investment companies are federal covered and
exempt from registration with the state Administrator, the agent's
email is not required to be filed. (18242)
Under the Uniform Securities Act, all of the following meet the
definition of an agent, EXCEPT an individual who: - answer
Represents an issuer in effecting exempt transactions
Without exception, an individual who represents a broker-dealer in
effecting securities transactions is considered an agent. Also, if an
individual represents an issuer and receives compensation for
selling securities that have been subject to registration, she is an
agent. However, if an individual represents an issuer in an exempt
transaction, she is not considered an agent. Remember, if an
individual represents a broker-dealer in effecting securities
transactions, she must always register as an agent, even if she is
involved in executing exempt transactions. To determine if an
individual qualifies for an exception as an agent, determine who the
individual represents— a broker-dealer or issuer. Exceptions are
questions and answers
Fred works for Lasker Securities and is holding an investment
seminar in Connecticut. Fred has sent 100 invitations to people
located in New York. Since his firm has no place of business in New
York, he has the responses returned to his office in Connecticut.
Which TWO of the following statements are TRUE?
Lasker Securities would not need to be registered as a broker-dealer
in New York if it has no place of business in New York, and the
seminar is to be held in Connecticut.
Lasker Securities would need to be registered as a broker-dealer in
New York, since it is conducting business in the state.
Fred would need to register in the state of New York as an agent,
since he is doing business within the state.
Fred would not need to be registered as an agent in New York, but
must be registered in Connecticut, since the seminar will take place
in Connecticut. - answer II and III
Lasker is conducting business in the state of New York if its agents
solicit securities business within that state, even though the broker-
dealer has no place of business within the state. Sending invitations
to attend an investment seminar is considered doing business. Fred
must be registered as an agent in both states since he is acting on
behalf of the broker-dealer in the solicitation of securities business
in New York, and conducting an investment seminar in Connecticut.
Which of the following statements is TRUE concerning the posting of
a bond by a broker-dealer? - answer There is no bond requirement
if the broker-dealer does not have custody or discretionary
authority over client funds or securities
The Administrator may require broker-dealers to post bonds if they
have custody of or discretionary authority over client funds or
securities. The bond may be waived if the broker-dealer's net capital
exceeds a specified amount. The Administrator may determine this
amount.
,A soon-to-be-registered agent may take which of the following
actions?
Accept unsolicited orders
Invite prospective clients to seminars
Provide research reports to other agents for use with their clients
Cold-call potential clients and provide quotes - answer II and III
only
A broker-dealer may not allow an unregistered individual to act as
an agent unless the agent is exempt. The soon-to-be-registered
agent in this scenario may not accept orders, solicited or
unsolicited, be compensated based on sales, or cold-call clients.
Inviting clients to seminars and providing research to other agents
are not considered activities associated with an agent.
What form is required when registering as a broker-dealer? - answer
Form BD
Form BD is the Uniform Application for Broker-Dealer Registration,
which is filed with the SEC, SROs that have jurisdiction, and the
appropriate states, through the Central Registration Depository
(CRD) operated by FINRA.
A firm that is expecting to take its shares public has recently hired a
new employee to assist in selling shares to investors. According to
the Uniform Securities Act, which of the following statements is
TRUE? - answer The employee would be required to register in any
state in which he solicits investors
In this question, the employee is considered an agent of the issuer.
Since the stock is going to be sold publicly, the shares are required
to be registered along with the employees of the issuer selling
them. There are situations in which employees may be exempt from
registration (e.g., engaged in exempt transactions) however,
registration is generally required if shares are being sold to the
public. (
, To cut costs, a broker-dealer hires some college interns. The firm
allows the interns to make calls to potential clients to market
investment opportunities in stocks, bonds, and mutual funds. This
action would be: - answer Acceptable if the interns are registered
Since the interns are attempting to effect transactions, they must
be registered. There is no requirement that an agent of a broker-
dealer have a college degree. If they are properly registered, any
employees of a broker-dealer may solicit securities transactions.
An agent of a broker-dealer has written an electronic marketing
piece that recommends the purchase of a new investment company
which is being offered by his firm. He wants to send it by e-mail to
40 non-institutional clients. If the product is suitable for each client
who's on the agent's distribution list, which of the following
statements is TRUE? - answer The content of the e-mail is not
required to be filed with the Administrator because the securities
are federal covered.
Advertisements, including standardized emails, are generally
required to be filed with the state Administrator before they're
used. However, advertisements for exempt securities and securities
that are sold in exempt transactions are not required to be filed.
Since registered investment companies are federal covered and
exempt from registration with the state Administrator, the agent's
email is not required to be filed. (18242)
Under the Uniform Securities Act, all of the following meet the
definition of an agent, EXCEPT an individual who: - answer
Represents an issuer in effecting exempt transactions
Without exception, an individual who represents a broker-dealer in
effecting securities transactions is considered an agent. Also, if an
individual represents an issuer and receives compensation for
selling securities that have been subject to registration, she is an
agent. However, if an individual represents an issuer in an exempt
transaction, she is not considered an agent. Remember, if an
individual represents a broker-dealer in effecting securities
transactions, she must always register as an agent, even if she is
involved in executing exempt transactions. To determine if an
individual qualifies for an exception as an agent, determine who the
individual represents— a broker-dealer or issuer. Exceptions are
