Series 63 Practice Test

Series 63 Broker-Dealers Practice Questions

Broker-Dealers makes up 7 of every 60 questions on a Tigertest Series 63 practice test. Here are 10 of the 24 questions on it, each with the answer and the reason.

Updated 2026-11-10 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. 1. Under the Uniform Securities Act, which person is NOT a broker-dealer?

   • A.A firm selling for others for fees
   • B.An issuer selling its own stock
   • C.A firm trading for customers
   • D.A dealer buying for inventory

   Answer: B. The USA excludes agents, issuers and banks, savings institutions and trust companies from the broker-dealer definition. Firms that effect trades for others or for their own account are broker-dealers.

2. 2. Which of these is excluded from the USA definition of broker-dealer?

   • A.A municipal bond dealer
   • B.A firm selling private placements
   • C.An online trading firm
   • D.A savings institution

   Answer: D. Banks, savings institutions and trust companies are excluded from the broker-dealer definition. Dealing only in exempt municipal bonds or private placements does not take a firm out of it.

3. 3. Under the USA, an individual who sells securities on behalf of a registered firm is:

   • A.An agent, not a broker-dealer
   • B.An issuer
   • C.Both an agent and a broker-dealer
   • D.A broker-dealer only

   Answer: A. The USA excludes agents from the broker-dealer definition. The individual registers as an agent, and the firm she represents registers as the broker-dealer.

4. 4. A broker-dealer with no office in State M underwrites an offering there, dealing only with the issuer. In State M the firm is:

   • A.Required to notice file there
   • B.Required to register its agents only
   • C.Not a broker-dealer there
   • D.Required to register there

   Answer: C. A firm with no place of business in the state that deals only with issuers, other broker-dealers and institutional buyers is outside the state's broker-dealer definition.

5. 5. A broker-dealer with no office in State R begins soliciting individual residents of State R. Under the USA it:

   • A.Needs only a notice filing
   • B.Must register only its agents
   • C.Must register in State R
   • D.Is excluded as an out-of-state firm

   Answer: C. The exclusion for out-of-state firms covers only business with issuers, other broker-dealers and institutions. Soliciting individual residents requires registration in that state.

6. 6. FINRA Rule 3110 requires each member firm to establish and maintain:

   • A.Written supervisory procedures
   • B.A state-approved fee schedule
   • C.An on-site SEC examiner
   • D.A customer insurance fund

   Answer: A. Rule 3110 requires a supervisory system and written procedures reasonably designed to achieve compliance with securities laws and FINRA rules. SIPC, not the firm, provides customer protection on failure.

7. 7. A broker-dealer applying to register with the SEC and the states through the CRD system files:

   • A.Form U5
   • B.Form U4
   • C.Form ADV
   • D.Form BD

   Answer: D. Form BD is the uniform application for broker-dealer registration. Form U4 registers individuals, Form U5 ends their registration, and Form ADV is for investment advisers.

8. 8. Under NSMIA, a state's net capital requirement for a registered broker-dealer:

   • A.Applies only to new firms
   • B.Cannot exceed the SEC's
   • C.Must be twice the SEC's
   • D.Is set by FINRA alone

   Answer: B. NSMIA bars states from imposing capital, custody, margin, financial responsibility, recordkeeping, bonding or reporting requirements on broker-dealers that differ from or add to federal rules.

9. 9. Under FINRA Rule 3110, a branch office that does not supervise other offices must be inspected at least:

   • A.Every six months
   • B.Every three years
   • C.Every single year
   • D.Every five years

   Answer: B. OSJs and supervisory branch offices are inspected at least yearly. Non-supervisory branches are inspected at least every three years, and non-branch locations on a regular periodic schedule.

10. 10. FINRA Rule 3110 requires an annual compliance meeting with:

    • A.The state Administrator
    • B.Only branch managers
    • C.Each customer with a margin account
    • D.Each registered representative

    Answer: D. Each registered representative must attend an interview or meeting at least once a year at which compliance matters relevant to their activities are discussed.