Series 63 Agents of Broker-Dealers Practice Questions
Agents of Broker-Dealers makes up 8 of every 60 questions on a Tigertest Series 63 practice test. Here are 10 of the 26 questions on it, each with the answer and the reason.
Updated by the Tigertest team. Based on NASAA's Series 63 test specifications. Original questions; 60 per test in the real exam's proportions, 43 of 60 to pass. Not affiliated with NASAA or FINRA.
1. Which form does a firm file to register an individual agent with the states?
- A.Form U5
- B.Form U4
- C.Form BD
- D.Form ADV Part 2
Answer: B. Form U4, the uniform application for securities industry registration, registers agents and IARs through the CRD system. Form BD registers the firm, and Form U5 ends an individual's registration.
2. A bank employee sells the bank's own stock to its customers and gets no extra pay for it. Under the USA she is:
- A.An agent of a broker-dealer
- B.An investment adviser rep
- C.An agent of the issuer
- D.Not an agent
Answer: D. Bank securities are exempt securities, and an individual representing the issuer in transactions in them is excluded from the agent definition. Selling them for a broker-dealer would require registration.
3. An employee of a county sells the county's own bonds to investors. Under the USA she is:
- A.Excluded as an agent
- B.An investment adviser
- C.An agent who must register
- D.A broker-dealer
Answer: A. An individual representing an issuer in transactions in certain exempt securities, including government and municipal securities, is excluded from the agent definition. Selling the same bonds for a broker-dealer would require registration.
4. A corporation's officer sells shares of its new, non-exempt public offering and is paid per sale. Under the USA she is:
- A.A broker-dealer
- B.Excluded as an insider
- C.An agent of the issuer
- D.Not an agent, as an officer
Answer: C. Officers and directors are agents only if they otherwise meet the definition. Selling a non-exempt offering in a non-exempt transaction for pay does meet it, so she must register.
5. An agent of a broker-dealer sells only U.S. Treasury bonds to customers. Under the USA the agent:
- A.Needs only a notice filing
- B.Registers only with the SEC
- C.Must still register
- D.Is excluded from registration
Answer: C. The exclusion for selling exempt securities covers individuals representing the issuer. An individual representing a broker-dealer must register as an agent whatever the securities sold.
6. A receptionist at a broker-dealer only answers phones and schedules meetings. Under the USA she is:
- A.Not required to register
- B.A registered principal
- C.An investment adviser rep
- D.An agent of the firm
Answer: A. Clerical and administrative staff who do not effect or attempt to effect securities transactions are not agents. Soliciting orders or recommending securities would change that.
7. An agent may transact securities business in a state only while she is:
- A.Under a signed customer contract
- B.Registered in her home state only
- C.Supervised by a principal of any firm
- D.Registered, with a registered firm
Answer: D. Agent registration is tied to a broker-dealer or issuer. The agent must be registered in the state where she does business, and the firm she represents must also be registered or exempt.
8. An agent leaves Firm A to join Firm B. Under the USA, who must promptly notify the Administrator?
- A.Only Firm B, the new firm
- B.The agent and both firms
- C.Only the agent herself
- D.Only Firm A, the old firm
Answer: B. When an agent begins or ends a connection with a broker-dealer or issuer, the agent as well as the firm must promptly notify the Administrator, so both firms and the agent report the move.
9. A registered agent is charged with a felony. Her firm must amend her Form U4 no later than:
- A.At her annual renewal
- B.30 days after learning of it
- C.10 days after a conviction only
- D.60 days after learning of it
Answer: B. Form U4 amendments are due within 30 days after the firm learns of the facts. A felony charge is reportable when it is filed, not only on conviction.
10. When a firm files Form U5 for a departing agent, it must also:
- A.Get the agent's signature
- B.Post it on its website
- C.Send a copy to each customer
- D.Give the agent a copy
Answer: D. FINRA's by-laws require the firm to provide the individual with a copy of the Form U5 at the same time it is filed, so the agent can respond to anything reported.
Practice all 26 agents of broker-dealers questions, and the rest of the 200-question bank, in the free Series 63 training sets. Questions you miss come back until you have mastered them.
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