MGRADES
FINRA Series 63 UPDATED ACTUAL
Exam Questions and CORRECT Answers
selling away - CORRECT ANSWER - when a representative engages in private securities
transactions without the knowledge or consent of his employer.
commingling - CORRECT ANSWER - when a brokerage firm combines its securities with
customer's securities (e.g., to present collateral for a bank loan).
historical performance - CORRECT ANSWER - may be shown to investors as long as
proper disclosure is provided indicating that it DOES NOT predict future results.
legal person - CORRECT ANSWER - an entity that can engage in legal activities such as
signing contracts or opening accounts. These folks are not dead, minors, or people who have
been declared mentally incompetent.
promptly - CORRECT ANSWER - The time frame that agents as well as broker-dealers or
issuers notify the Administrator when agents begin or terminate employment.
December 31st, annually - CORRECT ANSWER - Registration for both agents and
investment adviser representatives expires:
administrator - CORRECT ANSWER - The official or agency administering the securities
laws of a state.
advertisement - CORRECT ANSWER - Any material designed for use by newspapers,
magazines, radio, television, telephone recording or any other public medium to solicit business.
agent - CORRECT ANSWER - An individual who represents a broker/dealer or an issuer
when selling or trying to sell securities to the investing public. This individual is considered an
_____ whether he or she actually receives or simply solicits orders. Also known as "registered
representatives."
, MGRADES
anti-fraud rules - CORRECT ANSWER - Although exempt securities and securities sold
in exempt transactions are exempt from the registration and advertising filing requirements of the
Uniform Securities Act, no security or person is exempt from the ________________.
associated person - CORRECT ANSWER - Any employee, manager, director, officer or
partner of a member broker/dealer or another entity (issuer, bank, etc.) or any person controlling,
controlled by or in common control with that member is considered an _____________________
of that member.
blue-sky laws - CORRECT ANSWER - State regulations governing the securities
industry.
broker/dealer - CORRECT ANSWER - any person engaged in the business of effecting
transactions in securities for the account of others or for his own account.
consent to service of process - CORRECT ANSWER - When applying for registration in a
state, agents, broker/dealers and investment advisers must agree to respond to all subpoenas
served on them in that state, even if they don't reside there. This is called
_____________________________.
exempt security - CORRECT ANSWER - A security exempt from the registration
requirements (although not from the anti-fraud requirements) of the Uniform Securities Act (for
example, U.S. government and municipal securities).
exempt transaction - CORRECT ANSWER - A transaction exempt from registration and
advertising requirements under the Uniform Securities Act. Examples of exempt transactions
include private placements and fiduciary transactions.
federal covered advisor - CORRECT ANSWER - An investment adviser that is regulated
by the Securities Exchange Commission (SEC) under the Investment Adviser's Act of 1940
rather than the state. Generally, those who manage investment company (mutual fund) portfolios
or those who have more than $30 million in assets under management.
FINRA Series 63 UPDATED ACTUAL
Exam Questions and CORRECT Answers
selling away - CORRECT ANSWER - when a representative engages in private securities
transactions without the knowledge or consent of his employer.
commingling - CORRECT ANSWER - when a brokerage firm combines its securities with
customer's securities (e.g., to present collateral for a bank loan).
historical performance - CORRECT ANSWER - may be shown to investors as long as
proper disclosure is provided indicating that it DOES NOT predict future results.
legal person - CORRECT ANSWER - an entity that can engage in legal activities such as
signing contracts or opening accounts. These folks are not dead, minors, or people who have
been declared mentally incompetent.
promptly - CORRECT ANSWER - The time frame that agents as well as broker-dealers or
issuers notify the Administrator when agents begin or terminate employment.
December 31st, annually - CORRECT ANSWER - Registration for both agents and
investment adviser representatives expires:
administrator - CORRECT ANSWER - The official or agency administering the securities
laws of a state.
advertisement - CORRECT ANSWER - Any material designed for use by newspapers,
magazines, radio, television, telephone recording or any other public medium to solicit business.
agent - CORRECT ANSWER - An individual who represents a broker/dealer or an issuer
when selling or trying to sell securities to the investing public. This individual is considered an
_____ whether he or she actually receives or simply solicits orders. Also known as "registered
representatives."
, MGRADES
anti-fraud rules - CORRECT ANSWER - Although exempt securities and securities sold
in exempt transactions are exempt from the registration and advertising filing requirements of the
Uniform Securities Act, no security or person is exempt from the ________________.
associated person - CORRECT ANSWER - Any employee, manager, director, officer or
partner of a member broker/dealer or another entity (issuer, bank, etc.) or any person controlling,
controlled by or in common control with that member is considered an _____________________
of that member.
blue-sky laws - CORRECT ANSWER - State regulations governing the securities
industry.
broker/dealer - CORRECT ANSWER - any person engaged in the business of effecting
transactions in securities for the account of others or for his own account.
consent to service of process - CORRECT ANSWER - When applying for registration in a
state, agents, broker/dealers and investment advisers must agree to respond to all subpoenas
served on them in that state, even if they don't reside there. This is called
_____________________________.
exempt security - CORRECT ANSWER - A security exempt from the registration
requirements (although not from the anti-fraud requirements) of the Uniform Securities Act (for
example, U.S. government and municipal securities).
exempt transaction - CORRECT ANSWER - A transaction exempt from registration and
advertising requirements under the Uniform Securities Act. Examples of exempt transactions
include private placements and fiduciary transactions.
federal covered advisor - CORRECT ANSWER - An investment adviser that is regulated
by the Securities Exchange Commission (SEC) under the Investment Adviser's Act of 1940
rather than the state. Generally, those who manage investment company (mutual fund) portfolios
or those who have more than $30 million in assets under management.
