FINRA Series63 Exam Syllabus Topics:
| Section | Weight | Objectives |
|---|---|---|
| Topic 1: Regulation of Investment Advisers | 5% | - Federal vs state adviser regulation - Investment adviser registration rules |
| Topic 2: Communication with Customers and Prospects | 20% | - Advertising and correspondence rules - Disclosure requirements |
| Topic 3: Regulation of Broker-Dealers | 12% | - Broker-dealer regulatory requirements - Federal and state registration standards |
| Topic 4: Regulation of Investment Adviser Representatives | 5% | - IAR registration and obligations - Recordkeeping and contract standards |
| Topic 5: Remedies and Administrative Provisions | 9% | - Enforcement and penalties - State Administrator authority |
| Topic 6: Regulations of Securities and Issuers | 9% | - Securities registration and exemptions - Issuer regulation principles |
| Topic 7: Ethical Practices and Obligations | 25% | - Conflicts of interest and fiduciary duties - Fraudulent and unethical conduct |
| Topic 8: Regulation of Broker-Dealer Agents | 13% | - Agent registration requirements - Associated person regulations |
FINRA Uniform Securities Agent State Law Examination Sample Questions:
Question #1
After passing the necessary exams, you must submit which of the following to the state Administrator when applying for registration as an agent?
A. proof that you meet the state's minimum net capital requirement
B. Form ADV
C. U-4
D. a recent photograph of yourself
Question #2
Which of the following is an example of commingling?
A. Sly is an agent with a broker-dealer who recently executed a stock purchase for his client and had the client make the check for the purchase out to Sly for deposit in Sly's broker-dealer account.
B. Mr. Hawk encourages his clients to leave their securities in "street name" with the broker-dealer for which Mr. Hawk works.
C. All of the above are examples of commingling.
D. In order to generate more commissions for herself Ms. Fox makes trades on some of her client's accounts and has the trade confirmations sent to a P.O box she owns.
Question #3
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. I and III only
C. III only
D. II only
Question #4
The Turnover Corporation, a firm with 25,000 employees, has recently hired 50 new employees, many of whom have been hired to replace middle-level managers who have retired. Turnover has omitted this fact from its prospectus. Turnover is guilty of
A. misrepresentation.
B. fraud.
C. misusing insider information.
D. nothing. The hiring of 50 new employees by a firm with 25,000 employees is not a material fact.
Question #5
Don is a state-registered agent with GetErDone Broker-Dealers. He has three other friends who are licensed agents-Huey, Dewey, and Louie. Huey is also an agent with GetErDone Broker-Dealers. Dewey is an agent with a different firm in the same city, CanDo Broker-Dealers. Louie works for a Broker-Dealer with an office just across the state line.
Don can enter a commission-splitting agreement with
A. Huey only
B. Either Huey, Dewey, or Louie or any combination of the three
C. Dewey only
D. either Huey or Dewey or both
Solutions:
| Question #1 Answer: C | Question #2 Answer: A | Question #3 Answer: B | Question #4 Answer: D | Question #5 Answer: A |
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