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FINRA Series63 Exam Overview:

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FINRA Uniform Securities Agent State Law Examination Sample Questions:

Question 1

In which of the following scenarios is an investment adviser representative required to disclose the fact that someone other than the representative performed the research on which his advice to the client is based?
I. The investment adviser representative recommends the same asset allocation for his client that a buddy of his did after his buddy had done some research for a client with similar characteristics.
II. The investment adviser representative provides a recommendation for his client based on research provided by a broker-dealer that provides the investment adviser with its analysts' recommendations in return for trades that the investment adviser executes using the services of the broker-dealer, as well as a couple of other research sources he finds on the internet.
III. The investment adviser representative submitted his client's information to a data base that provided a recommendation for the asset allocation of the client's investment monies that the adviser deemed was sound and, therefore, recommended it to his client.

A. I only
B. III only
C. I and III only
D. II only

Question 2

The Administrator of a state can deny an application if

A. the registrant has been enjoined from engaging in activities involving securities in another state.
B. the application is missing information.
C. any of the above is true.
D. the Administrator determines the applicant is not financially solvent.

Question 3

Vious and Associates is a small broker-dealer trying to generate more business. To this end, the firm had a professional four-color brochure printed that provides the years of industry experience of its management along with other information. The firm's founder, Ms. D. Vious, is listed as having over 30 years of experience in the industry. Ms. D. Vious has worked for broker-dealers for over 30 years, but for 20 of those 30 years, she was a secretary.
Has D. Vious violated any securities laws?

A. No. Ms. D. Vious' years of experience is not a material fact that would affect an investor's investment decision.
B. No. Advertising brochures are not securities.
C. No. Technically, Ms. D. Vious does have over 30 years of experience in the industry, even though it was not in the capacity of an agent or a broker-dealer.
D. Yes. The broker-dealer is making a misleading statement in an advertising brochure in order to convince investors to do business with the firm.

Question 4

Which of the following would be considered an "issuer" transaction?

A. Kim sells an AT&T bond she holds that still has three years remaining to maturity.
B. None of the above is an "issuer" transaction.
C. Jacob calls his broker and places an order to purchase 100 shares of Hasbro, Inc. on the open market.
D. Maria purchases 500 shares of Dodge and Cox's International Fund, a mutual fund investing in foreign securities.

Question 5

BigCash Broker-Dealers is registered in the state and is in the process of purchasing a smaller broker-dealer, Target Investments, as a subsidiary. Target Investments is also registered in the state.
After completing the purchase, what actions must BigCash take regarding registration of its new subsidiary?

A. BigCash will need to pay the annual filing fees required by the Administrator, but will not need to file a new registration application.
B. BigCash must file a new application with the state to register its new subsidiary, but will be able to utilize the remainder of any annual filing fees that Target Investments had paid for the year.
C. BigCash need do nothing since Target Investments was already duly registered with the state as a broker-dealer.
D. BigCash must file a new application with the state to register its new subsidiary and must also pay the annual filing fees required by the Administrator.

Solutions: