Series 63 Test UPDATED Exam Questions
and CORRECT Answers
Investment Adviser - CORRECT ANSWER - a person who, for compensation, engages in
the business of advising others in the purchase or sale of securities
1. Providing Advice about securities 2. Providing these services as a Business 3. Receiving
Compensation for these services (Usually a firm rather than individual)
Investment Adviser Representative - CORRECT ANSWER - Makes recommendations or
gives advice regarding securities Manages accounts or portfolios of clients Determines which
recommendations or what advice should be given Solicits, offers, or negotiates the sale of
investment advisory services, makes investment decisions, supervises other IARS
GTK:
Investment advisers and investment adviser representatives are also referred to as registered
investment advisers (RIAs) and registered investment adviser representatives (RIARs).
Securities Act of 1933 - CORRECT ANSWER - The first major federal law regulating the
securities industry. It requires firms issuing new stock in a public offering to file a registration
statement with the SEC.
The Securities Exchange Act of 1934 - CORRECT ANSWER - An act that regulates the
trading of securities such as stocks and bonds in the secondary market & registration of broker
dealers
The Investment Advisers Act of 1940 - CORRECT ANSWER - This federal law governs
investment advisers that must register with the SEC.
The National Securities Markets Improvement Act of 1996 - CORRECT ANSWER -
National Securities Markets Improvement Act (NSMIA) to eliminate the duplication of state and
federal regulation of securities and advisers.
NSMIA created a specific category of securities that are exempt from formal state registration.
These securities are classified as federal covered securities and include:
,Securities listed on the U.S. exchanges (NYSE, Nasdaq, etc.)
Certain Regulation D offerings (private placements)
Securities sold to qualified purchasers (persons who own at least $5 million in investments)
Securities issued by registered investment companies (e.g., mutual funds)
Regulation A - CORRECT ANSWER - The JOBS Act expanded Regulation A (which was
originally $5 million) into the following two tiers:
Tier 1 - Sales of up to $20 million are permitted within a 12-month period. Of that amount, no
more than $6 million may be sold on behalf of selling shareholders.
‒ The offerings are subject to both SEC and blue sky review
‒ Continuing disclosure information must be filed
Tier 2 - Sales of up to $75 million are permitted within a 12-month period.
Of that amount, no more than $22.5 million may be sold on behalf of selling shareholders.
‒ The offerings are subject to SEC review, but not Blue-Sky review
‒ Has stricter continuing disclosure information and filing requirements
Rule 147A Intrastate Offerings - CORRECT ANSWER - - Investor Must hold securities
for 6 months before selling out of state
- Principal office in the state & meet the "doing business" rule
Registration by Notification (Filing) - CORRECT ANSWER - used by well-established
corporations that meet stringent financial requirements, larger issuers with securities that trade
on national exchange
Registration by Coordination - CORRECT ANSWER - A process that allows A security to
be sold in a state. It is available to an issuer that files for the security's registration under the
Securities Act of 1933 and files duplicates of the registration documents with the state
administrator. The state registration becomes effective at the same time the federal registration
statement becomes effective.
, Registration by Qualification - CORRECT ANSWER - A process that allows a security to
be sold in a state. It is available to an issuer who files for the security's registration with the state
Administrator, meets minimum net worth, disclosure, and other requirements, and files
appropriate registration fees. The state registration becomes effective when the Administrator so
orders.
Effective Date of Registration - CORRECT ANSWER - A person's registration becomes
effective at noon on the 30th day after the filing of the application (or on the 30th day after the
filing of an amendment). Can grant it earlier
Form U5 - CORRECT ANSWER - When a registered representative resigns or is
terminated from employment with a member firm, the firm is required to notify FINRA within
30 days by filing Form U5 with the applicable details.
Form U6 - CORRECT ANSWER - used to report disciplinary actions and final arbitration
awards against an RR or a firm
Investment adviser that dont need to register - CORRECT ANSWER - No place of biz in
state
Only deal with institutions
up to 5 non institutional clients
Founder of a BD - CORRECT ANSWER - All original partners, officers, and directors of
a broker-dealer who are involved in effecting securities transactions are automatically registered
as agents when the broker-dealer initially registers with the state. If a found is not in the the day
to day of effecting transactions, they are no auto registered and will need to register if their job
changes.
Delivering the Brochure - CORRECT ANSWER - A state-registered investment adviser
that's entering into a contract with a client must deliver its brochure:
Not less than 48 hours prior to entering into any advisory contract with the client, OR
and CORRECT Answers
Investment Adviser - CORRECT ANSWER - a person who, for compensation, engages in
the business of advising others in the purchase or sale of securities
1. Providing Advice about securities 2. Providing these services as a Business 3. Receiving
Compensation for these services (Usually a firm rather than individual)
Investment Adviser Representative - CORRECT ANSWER - Makes recommendations or
gives advice regarding securities Manages accounts or portfolios of clients Determines which
recommendations or what advice should be given Solicits, offers, or negotiates the sale of
investment advisory services, makes investment decisions, supervises other IARS
GTK:
Investment advisers and investment adviser representatives are also referred to as registered
investment advisers (RIAs) and registered investment adviser representatives (RIARs).
Securities Act of 1933 - CORRECT ANSWER - The first major federal law regulating the
securities industry. It requires firms issuing new stock in a public offering to file a registration
statement with the SEC.
The Securities Exchange Act of 1934 - CORRECT ANSWER - An act that regulates the
trading of securities such as stocks and bonds in the secondary market & registration of broker
dealers
The Investment Advisers Act of 1940 - CORRECT ANSWER - This federal law governs
investment advisers that must register with the SEC.
The National Securities Markets Improvement Act of 1996 - CORRECT ANSWER -
National Securities Markets Improvement Act (NSMIA) to eliminate the duplication of state and
federal regulation of securities and advisers.
NSMIA created a specific category of securities that are exempt from formal state registration.
These securities are classified as federal covered securities and include:
,Securities listed on the U.S. exchanges (NYSE, Nasdaq, etc.)
Certain Regulation D offerings (private placements)
Securities sold to qualified purchasers (persons who own at least $5 million in investments)
Securities issued by registered investment companies (e.g., mutual funds)
Regulation A - CORRECT ANSWER - The JOBS Act expanded Regulation A (which was
originally $5 million) into the following two tiers:
Tier 1 - Sales of up to $20 million are permitted within a 12-month period. Of that amount, no
more than $6 million may be sold on behalf of selling shareholders.
‒ The offerings are subject to both SEC and blue sky review
‒ Continuing disclosure information must be filed
Tier 2 - Sales of up to $75 million are permitted within a 12-month period.
Of that amount, no more than $22.5 million may be sold on behalf of selling shareholders.
‒ The offerings are subject to SEC review, but not Blue-Sky review
‒ Has stricter continuing disclosure information and filing requirements
Rule 147A Intrastate Offerings - CORRECT ANSWER - - Investor Must hold securities
for 6 months before selling out of state
- Principal office in the state & meet the "doing business" rule
Registration by Notification (Filing) - CORRECT ANSWER - used by well-established
corporations that meet stringent financial requirements, larger issuers with securities that trade
on national exchange
Registration by Coordination - CORRECT ANSWER - A process that allows A security to
be sold in a state. It is available to an issuer that files for the security's registration under the
Securities Act of 1933 and files duplicates of the registration documents with the state
administrator. The state registration becomes effective at the same time the federal registration
statement becomes effective.
, Registration by Qualification - CORRECT ANSWER - A process that allows a security to
be sold in a state. It is available to an issuer who files for the security's registration with the state
Administrator, meets minimum net worth, disclosure, and other requirements, and files
appropriate registration fees. The state registration becomes effective when the Administrator so
orders.
Effective Date of Registration - CORRECT ANSWER - A person's registration becomes
effective at noon on the 30th day after the filing of the application (or on the 30th day after the
filing of an amendment). Can grant it earlier
Form U5 - CORRECT ANSWER - When a registered representative resigns or is
terminated from employment with a member firm, the firm is required to notify FINRA within
30 days by filing Form U5 with the applicable details.
Form U6 - CORRECT ANSWER - used to report disciplinary actions and final arbitration
awards against an RR or a firm
Investment adviser that dont need to register - CORRECT ANSWER - No place of biz in
state
Only deal with institutions
up to 5 non institutional clients
Founder of a BD - CORRECT ANSWER - All original partners, officers, and directors of
a broker-dealer who are involved in effecting securities transactions are automatically registered
as agents when the broker-dealer initially registers with the state. If a found is not in the the day
to day of effecting transactions, they are no auto registered and will need to register if their job
changes.
Delivering the Brochure - CORRECT ANSWER - A state-registered investment adviser
that's entering into a contract with a client must deliver its brochure:
Not less than 48 hours prior to entering into any advisory contract with the client, OR
