TEXAS SECURITIES AGENT LICENSING EXAM QUESTIONS AND CORRECT ANSWERS
(VERIFIED ANSWERS) PLUS RATIONALES 2026 Q&A |LATEST EXAM UPDATE 2026/2027.
Section One: Questions 1–100
Under the Uniform Securities Act, which of the following is considered an investment adviser
representative?
A. An individual who provides only administrative services for an investment adviser.
B. A clerical employee who accepts orders for securities.
C. An individual employed by an investment adviser who manages client portfolios.
D. A bank teller who refers clients to the investment department.
🟢C
🔴 RATIONALE: An investment adviser representative is defined as any partner, officer, director, or
employee of an investment adviser who provides investment advice, manages accounts, or solicits
advisory services.
Which entity is responsible for enforcing the rules set forth by the Securities Exchange Act of
1934?
A. NASAA
B. The SEC
C. FINRA
D. The SIPC
🟢B
🔴 RATIONALE: The Securities and Exchange Commission (SEC) is the federal regulatory body
empowered to enforce the provisions of the Securities Exchange Act of 1934.
An agent is currently registered in Texas. If the agent moves to a different state and wishes to
conduct business there, what must occur?
A. The agent is automatically registered in the new state.
,B. The agent must file an application for registration in the new state.
C. The agent only needs to notify the SEC.
D. The agent must wait for the current registration to expire.
🟢B
🔴 RATIONALE: Agents must be registered in every state in which they transact business. Moving
requires filing a registration application in the new jurisdiction.
Which of the following describes a "person" under the Uniform Securities Act?
A. A minor.
B. An incapacitated individual.
C. A corporation.
D. A deceased person's estate.
🟢C
🔴 RATIONALE: The Act defines a "person" as an individual, corporation, partnership, association,
joint stock company, or unincorporated organization.
A security that is exempt from registration requirements under the Uniform Securities Act is:
A. A corporate bond issued by a private company.
B. A stock listed on the New York Stock Exchange.
C. A hedge fund interest.
D. An unlisted penny stock.
🟢B
🔴 RATIONALE: Securities listed on major national exchanges are considered federal covered
securities and are generally exempt from state-level registration requirements.
What is the primary purpose of a prospectus?
A. To guarantee the success of the investment.
,B. To provide full and fair disclosure of all material facts regarding an offering.
C. To serve as a marketing brochure for the issuer.
D. To rank the investment against competitors.
🟢B
🔴 RATIONALE: The prospectus is a legal document required to provide potential investors with all
material information necessary to make an informed investment decision.
Which of the following activities by an agent is considered unethical?
A. Recommending a security based on the client's stated objectives.
B. Trading in a client's account without discretionary authority.
C. Disclosing all fees associated with a trade.
D. Following the instructions of a client with a power of attorney.
🟢B
🔴 RATIONALE: Executing trades in a customer account without discretionary authority (or written
power of attorney) constitutes unauthorized trading, which is prohibited.
When must a delivery of a final prospectus be made to a purchaser of a new issue?
A. Only if requested by the client.
B. No later than the time of the trade confirmation.
C. Within 30 days after the trade.
D. Only if the trade exceeds $10,000.
🟢B
🔴 RATIONALE: Federal law requires that a final prospectus be delivered to purchasers of a new
issue no later than the time the trade is confirmed.
Under the USA, an investment adviser must maintain records for how long?
A. 1 year.
, B. 3 years.
C. 5 years.
D. 10 years.
🟢C
🔴 RATIONALE: The Uniform Securities Act and SEC rules generally require investment advisers
to maintain core business and client records for a period of five years.
A state Administrator may deny an application for registration if:
A. The applicant has a minor traffic violation.
B. The applicant was convicted of a felony involving securities within the past 10 years.
C. The applicant is not a resident of the state.
D. The applicant is under 30 years old.
🟢B
🔴 RATIONALE: A conviction for a securities-related felony is a statutory disqualification and clear
grounds for the Administrator to deny registration.
Which of the following is a "non-exempt" security?
A. U.S. Treasury Bond.
B. Municipal bond issued by a Texas city.
C. Common stock of a startup company offered to the public.
D. Bank certificate of deposit.
🟢C
🔴 RATIONALE: Securities issued by private corporations offered to the general public must be
registered unless they qualify for a specific exemption; start-up stock typically does not.
What is "blue-sky" law?
A. Federal securities regulations.
(VERIFIED ANSWERS) PLUS RATIONALES 2026 Q&A |LATEST EXAM UPDATE 2026/2027.
Section One: Questions 1–100
Under the Uniform Securities Act, which of the following is considered an investment adviser
representative?
A. An individual who provides only administrative services for an investment adviser.
B. A clerical employee who accepts orders for securities.
C. An individual employed by an investment adviser who manages client portfolios.
D. A bank teller who refers clients to the investment department.
🟢C
🔴 RATIONALE: An investment adviser representative is defined as any partner, officer, director, or
employee of an investment adviser who provides investment advice, manages accounts, or solicits
advisory services.
Which entity is responsible for enforcing the rules set forth by the Securities Exchange Act of
1934?
A. NASAA
B. The SEC
C. FINRA
D. The SIPC
🟢B
🔴 RATIONALE: The Securities and Exchange Commission (SEC) is the federal regulatory body
empowered to enforce the provisions of the Securities Exchange Act of 1934.
An agent is currently registered in Texas. If the agent moves to a different state and wishes to
conduct business there, what must occur?
A. The agent is automatically registered in the new state.
,B. The agent must file an application for registration in the new state.
C. The agent only needs to notify the SEC.
D. The agent must wait for the current registration to expire.
🟢B
🔴 RATIONALE: Agents must be registered in every state in which they transact business. Moving
requires filing a registration application in the new jurisdiction.
Which of the following describes a "person" under the Uniform Securities Act?
A. A minor.
B. An incapacitated individual.
C. A corporation.
D. A deceased person's estate.
🟢C
🔴 RATIONALE: The Act defines a "person" as an individual, corporation, partnership, association,
joint stock company, or unincorporated organization.
A security that is exempt from registration requirements under the Uniform Securities Act is:
A. A corporate bond issued by a private company.
B. A stock listed on the New York Stock Exchange.
C. A hedge fund interest.
D. An unlisted penny stock.
🟢B
🔴 RATIONALE: Securities listed on major national exchanges are considered federal covered
securities and are generally exempt from state-level registration requirements.
What is the primary purpose of a prospectus?
A. To guarantee the success of the investment.
,B. To provide full and fair disclosure of all material facts regarding an offering.
C. To serve as a marketing brochure for the issuer.
D. To rank the investment against competitors.
🟢B
🔴 RATIONALE: The prospectus is a legal document required to provide potential investors with all
material information necessary to make an informed investment decision.
Which of the following activities by an agent is considered unethical?
A. Recommending a security based on the client's stated objectives.
B. Trading in a client's account without discretionary authority.
C. Disclosing all fees associated with a trade.
D. Following the instructions of a client with a power of attorney.
🟢B
🔴 RATIONALE: Executing trades in a customer account without discretionary authority (or written
power of attorney) constitutes unauthorized trading, which is prohibited.
When must a delivery of a final prospectus be made to a purchaser of a new issue?
A. Only if requested by the client.
B. No later than the time of the trade confirmation.
C. Within 30 days after the trade.
D. Only if the trade exceeds $10,000.
🟢B
🔴 RATIONALE: Federal law requires that a final prospectus be delivered to purchasers of a new
issue no later than the time the trade is confirmed.
Under the USA, an investment adviser must maintain records for how long?
A. 1 year.
, B. 3 years.
C. 5 years.
D. 10 years.
🟢C
🔴 RATIONALE: The Uniform Securities Act and SEC rules generally require investment advisers
to maintain core business and client records for a period of five years.
A state Administrator may deny an application for registration if:
A. The applicant has a minor traffic violation.
B. The applicant was convicted of a felony involving securities within the past 10 years.
C. The applicant is not a resident of the state.
D. The applicant is under 30 years old.
🟢B
🔴 RATIONALE: A conviction for a securities-related felony is a statutory disqualification and clear
grounds for the Administrator to deny registration.
Which of the following is a "non-exempt" security?
A. U.S. Treasury Bond.
B. Municipal bond issued by a Texas city.
C. Common stock of a startup company offered to the public.
D. Bank certificate of deposit.
🟢C
🔴 RATIONALE: Securities issued by private corporations offered to the general public must be
registered unless they qualify for a specific exemption; start-up stock typically does not.
What is "blue-sky" law?
A. Federal securities regulations.
