[Nov-2023] Latest Series63 Exam Dumps for Pass Guaranteed
Reliable Uniform Securities State Law Series63 Dumps PDF Nov 29, 2023 Recently Updated Questions
NEW QUESTION # 104
Investment Adviser Foo Lish, LLC has begun serving as a custodian of its clients' assets. Foo Lish, LLC
must now
I. file a new U-5 form with the Administrator.
II. meet higher net capital requirements than before.
III. file an updated Form ADV with the Administrator.
IV. pay a CPA to do an annual unannounced audit of the firm.
- A. II and III only
- B. I, II, III, and IV
- C. II, III, and IV only
- D. I and II only
Answer: C
Explanation:
Selections II, III, and IV are correct. When Foo Lish begins serving as a custodian of its
clients' assets, it must file an updated Form ADV with the Administrator, meet higher net capital
requirements than before, and pay a CPA to do an annual unannounced audit of the firm. The U-5 form is
filed when a representative leaves the firm.
NEW QUESTION # 105
You are an agent with a broker-dealer and have learned of limited partnership interests being sold by a
small company that is planning to come out with a product that you think is going to "wow" the market.
You would like to get in on the action, but the minimum investment needed is $10,000, and you don't have
that kind of dough lying around. You talk to your brother, who is also one of your clients, and get him
interested in investing in the firm, too. The two of you decide to pull your money together, each putting in
$ 5,000, and you agree to split any profits or losses. Is this permitted?
- A. Yes, as long as your brother provides your firm with his written consent.
- B. Maybe. But it will require written consent from both your brother and your firm.
- C. Yes. This is permitted since the agreement is between you and a family member.
- D. No. Under no circumstances can an agent enter a joint investment with a client under the guidelines of
the Uniform Securities Act.
Answer: B
Explanation:
It may be permissible for you and your brother to open a joint account to invest in this
partnership since he is a family member, but it will require the written consent of both your brother and
your firm, and your firm is under no obligation to give its consent.
NEW QUESTION # 106
It has come to the attention of the Administrator of the state that Samuel Shyster provided false information on his application to become a registered investment adviser with the state. Prior to revoking Samuel's license, the Administrator will provide Samuel with which of the following?
I. prior notice
II. an opportunity to fill out a new registration statement
III. an opportunity for a hearing
IV. a written statement regarding the facts and the legal consequences
- A. I, II, and III
- B. I, II, III, and IV
- C. I, II, and IV
- D. I, III, and IV
Answer: D
Explanation:
Explanation
Prior to revoking Samuel's license, the Administrator will provide Samuel with prior notice (I), an opportunity for a hearing (III), and a written statement regarding the facts and the legal consequences (IV).
NEW QUESTION # 107
You are an investment adviser representative. Your client, Mr. I. M. Pulse, calls you with what he thinks is exciting news. He just passed a restaurant and saw Microsoft's Bill Gates having lunch with a local entrepreneur who owns a small firm in the computer software industry that trades on the OTC pink sheets. He is sure that this means Microsoft is negotiating a purchase of the smaller company and instructs you to take the cash balance in his account and buy shares of the local company. You should
- A. tell Mr. I.M. Pulse that this would be an illegal insider trade and that you are unable to fulfill his request.
- B. call your supervisor and alert him immediately of Mr. Pulse's attempt to have you place an illegal order on his behalf in case Mr. Pulse decides to place the order elsewhere.
- C. advise Mr. Pulse that he may be jumping the gun, but place the order if he insists.
- D. do both A and B.
Answer: C
Explanation:
Explanation
If Mr. Pulse wants you to place an order to buy a firm that he thinks will become a target of Microsoft based on seeing Bill Gates and the owner of the firm dining together, you should, as his adviser, inform him that he may be jumping the gun and drawing a false conclusion, but you should place the order if he continues to insist. It is a legitimate order, and you are obligated to follow his instructions. It does not constitute illegal insider trading because Mr. Pulse has no way of knowing what the two men were talking about. They may just be old high school buddies catching up on the news.
NEW QUESTION # 108
Iggy recently started his own company. He soon discovered it required more cash to keep it going than he had anticipated. He ran an ad in the local paper for investors and got a response. He found a template for a promissory note on the internet, filled in the requisite information specific to the agreement he and the investor had worked out, and printed it out. On it, he promised to make monthly interest payments of 2% on the loan and to repay the principal amount at the end of 18 months. A few months after the arrangement, Iggy read an article in a small business publication that indicated that promissory notes had to be registered with the state unless they were sold in an exempt transaction, such as one enacted with a financial institution, prior to being offered for sale. The article indicated that a seller who had sold an unregistered note in error could remedy the situation by sending the buyer a formal offer to buy the security back, with interest. Iggy turned to the computer once again, found a form that could be used for a formal offer of rescission, filled it out, and sent it to the investor. Having done this,
- A. Iggy cannot be sued for civil damages if the investor fails to respond to the offer within 30 days.
- B. Iggy must wait 6 months for a response from the investor. If no response is received by the end of 6 months, Iggy is off the hook.
- C. Iggy will not be assessed any penalties by the Administrator of the state, but the investor can still sue for damages in civil court.
- D. Iggy must follow up with a second notice sent via registered mail if he has not heard from the investor within 30 days.
Answer: A
Explanation:
Explanation
Since Iggy realized the promissory note he had sold to the investor required state registration and sent a formal offer of rescission to the investor, he cannot be sued for civil damages if the investor has not responded to the offer within 30 days. The investor has 30 days to accept or reject the offer. If he either rejects it or fails to accept it by not responding to the offer at all, the investor has lost the right to sue for damages.
NEW QUESTION # 109
According to the NASAA Model Rules, which of the following institutions would not be considered a
qualified custodian?
- A. a foreign financial institution
- B. a broker-dealer that is registered with the state
- C. a bank that is insured by a private, state-sponsored insurance company
- D. a savings institution that is insured by the FDIC
Answer: C
Explanation:
According to the NASAA Model Rules, a bank that is insured by a private, state-licensed
insurance company would not be considered a qualified custodian. Registered broker-dealers, foreign
financial institutions, and banks and savings institutions that are insured by the FDIC are on the list of
qualified custodians.
NEW QUESTION # 110
Once you have passed the Series 63 examination, which entity must then approve your application to sell securities?
- A. the state administrator
- B. NASAA
- C. FINRA
- D. SEC
Answer: A
Explanation:
Explanation
Once you have passed the Series 63 exam, it is the state administrator who can approve or deny your registration. NASAA developed the Uniform Securities Agent State Law Examination and FINRA administers it. The SEC is not a party to the state registration process.
NEW QUESTION # 111
Until yesterday Maddie was a registered agent employed by the broker-dealer, QuikDeals. Yesterday afternoon, issues that had been brewing between her and another employee of the firm came to a head, and Maddie impulsively quit her job.
At this point,
- A. Maddie has sixty days to find a job with another broker-dealer, or she will need to file a new registration application.
- B. Maddie is required to call all of her clients at QuikDeals to inform them she is no longer employed there.
- C. Maddie will have to file a new application for registration with the Administrator upon finding employment with another broker-dealer since she is no longer considered to be a registered agent by the state.
- D. Maddie has thirty days to find a job with another broker-dealer, or she will need to file a new registration application.
Answer: C
Explanation:
Explanation
When Maddie quit her job, her status as a state-registered securities agent was automatically terminated, and she will need to file a new application for registration with the Administrator upon obtaining a position with another broker-dealer. If she does so within thirty days, her registration will become effective as soon as she has filed her application and paid her application fee. While she is required to notify the Administrator that she has terminated her employment with QuikDeals, there is no requirement that she contact any of her clients at QuikDeals.
NEW QUESTION # 112
Mr. Bigwig, CEO of HiGrowth Corporation, meets with the president of BigFee Investment Bankers and arranges for BigFee to underwrite an Initial Public Offering (IPO) for the firm.
When the IPO comes to market, GetErDone Broker-Dealers is part of the selling group, which handles the sale of the stock to the public. In this scenario, which party is the issuer?
- A. Mr. Bigwig
- B. HiGrowth Corporation
- C. BigFee Investment Bankers
- D. GetErDone Broker-Dealers
Answer: B
Explanation:
Explanation
HiGrowth Corporation is the issuer in this instance. Its stock will be sold, and HiGrowth will receive the proceeds from the sale-less BigFee's underwriting spread. Mr. Bigwig is merely HiGrowth's representative in this instance.
NEW QUESTION # 113
Which of the following constitutes a non-punitive order?
- A. registration cancellation
- B. summary license suspension
- C. registration denial
- D. All of the above are punitive orders.
Answer: A
Explanation:
Explanation
Registration cancellation is a non-punitive order. The Administrator issues a cancellation order if a registered person dies, becomes mentally incompetent, is no longer in business, or is unable to be located.
NEW QUESTION # 114
Erin is a registered agent who works for SecureMoney Brokers-dealers. One of her clients, Mrs. McTurk, is a recently-widowed woman who relies on Erin for advice about her investment portfolio. Mrs. McTurk reminds Erin of her own grandmother, and she is happy to provide guidance within the sphere of her own knowledge.
Based on these facts, which of the following statements is true?
- A. SecureMoney Broker-dealers must register as an investment adviser since one of its employees is providing investment advice.
- B. SecureMoney Broker-dealers must register as an investment adviser since one of its employees is providing investment advice, and Erin must register as an investment adviser representative as the firm's employee.
- C. Erin must register as an investment adviser since she is providing investment advice.
- D. Neither SecureMoney Broker-dealers nor Erin must register as an investment adviser based on the facts provided.
Answer: D
Explanation:
Explanation
Neither SecureMoney Broker-dealers nor Erin must register as an investment adviser based on the facts provided since neither the broker-dealer nor Erin is receiving any compensation for the advice Erin is giving Mrs. McTurk. In this instance, the advice provided is considered incidental to the broker-dealer business.
NEW QUESTION # 115
Which of the following would not be found in a tombstone advertisement?
- A. the names of the underwriters
- B. the interest rate and time to maturity of a bond issue
- C. the price at which the security will be offered
- D. the name of the issuer
Answer: C
Explanation:
The price at which the security will be offered will not be found in a tombstone advertisement.
A tombstone advertisement is not an offer to sell the security and, in any case, it is unlikely that the final
offer price will have even been decided on at this point.
NEW QUESTION # 116
Your client calls you with a market order to purchase 500 shares of the stock of Oracle and asks when payment will be due. If today is Wednesday, September 15th, you inform the client that payment is due on
- A. Thursday, September 16th.
- B. Monday, September 20th.
- C. Saturday, September 18th.
- D. Friday, September 17th.
Answer: B
Explanation:
Explanation
If your client places an order to purchase 500 shares of Oracle on the open market on Wednesday, September
15th, payment will be due on Monday, September 20th. The settlement date for stock transactions is T + 3, which means the third business day after the trade. Saturday is not a business day.
NEW QUESTION # 117
Harry Lange manages the investment portfolio for the Fidelity Magellan Mutual Fund. Mr. Lange is a(n)
- A. investment adviser.
- B. agent.
- C. broker-dealer.
- D. investment company.
Answer: A
Explanation:
If Harry Lange is managing the investment portfolio of Fidelity Magellan Mutual Fund, he is
an investment adviser. He is making the investment decisions and receives a percentage of the assets
under management as his compensation. He is not selling the mutual fund or the fund's investors
anything, which is the job of a broker-dealer or an agent. Fidelity Magellan is the investment company.
NEW QUESTION # 118
In which of the following scenarios would the Administrator of a state not have jurisdiction?
I. A monthly newspaper published by a resident of the state who is not a registered investment adviser
has a column in which the publisher makes specific investment recommendations for clients who write in
for advice. About 80% of the circulation of the publication is to out-of-state residents.
II. An internet blog posted by an out-of-state resident makes investment recommendations.
III. An out-of-state firm solicits buyers for its promissory notes within the state.
- A. I and II only
- B. I, II, and III
- C. I only
- D. II only
Answer: A
Explanation:
The administrator of a state would not have jurisdiction in the scenarios described in
Selections I and II. In Selection I, more than 2/3 of the circulation of the newspaper is outside the state,
which excludes it from the jurisdiction of the Administrator. Selection II describes an electronic
communication that originates from outside the state, which excludes it. Selection III constitutes an offer
to sell securities within the state, and this will always fall under the jurisdiction of the Administrator of the
state.
NEW QUESTION # 119
Which of the following does not describe a prohibited practice for broker-dealers under the NASAA Model
Rules?
I. SecureMoney Broker-Dealers has received a request from a client who wants SecureMoney to "identify
a few solid firms in the Asian market and invest up to $20,000 in them." SecureMoney executes the
purchases and receives the requisite signed discretionary authorization from the client before the
settlement date.
II. CanDo Broker-Dealers executes a margin transaction for a client, promptly receiving a signed, written
margin agreement from the client after the transaction takes place.
III. GetErDone Broker-Dealers receives a call from a client who wants to purchase some securities on
margin. GetErDone has the client come into the office to sign a properly executed margin agreement prior
to effecting the transaction.
- A. I and III only
- B. III only
- C. II and III only
- D. None of the selections are prohibited practices.
Answer: C
Explanation:
Neither Selection II nor Selection III describes a prohibited practice for broker-dealers under
the NASAA Model Rules. Broker-dealers are permitted to execute margin transactions for clients as long
as they receive a signed, written margin agreement promptly after the initial margin transaction takes
place. The agreement need not be signed beforehand. Discretionary authorizations do need to be signed
before the broker-dealer executes any discretionary transactions for a client, so Selection I describes a
prohibited practice.
NEW QUESTION # 120
When a customer files a complaint with a broker-dealer,
I. the broker-dealer must submit the complaint to the firm's compliance department.
II. the broker-dealer must provide a prompt written response to the complainant.
III. the broker-dealer must temporarily suspend the activities of any agent named in the complaint.
- A. I and II only
- B. II and III only
- C. I and III only
- D. I, II and III
Answer: A
Explanation:
Only Selections I and II are true. When a customer files a complaint with a broker-dealer, the
broker-dealer is required to submit the complaint to the firm's compliance department, if any, and to
provide the complainant with a prompt written response. It is not necessary to suspend the activities of an
agent named in the complaint.
NEW QUESTION # 121
When selling shares in a closed-end investment company, an agent must inform the client of any
I. commissions
II. underwriting fees
III. miscellaneous offering expenses
- A. I and III only
- B. I only
- C. I and II only
- D. I, II and III
Answer: D
Explanation:
When selling shares in a closed-end investment company, an agent must inform the client of
any commissions, underwriting fees, or miscellaneous other offering expenses involved.
NEW QUESTION # 122
Maddie, a registered agent affiliated with broker-dealer QuikDeals, quit her job on the spur of the moment.
Under the guidelines of the Uniform Securities Act (USA), who is responsible for notifying the Administrator?
- A. Maddie has the sole responsibility for notifying the Administrator.
- B. It depends. If Maddie becomes affiliated with another broker-dealer within thirty days, then she must notify the Administrator of her termination with QuikDeals and her current affiliation with the new firm.
Otherwise, only QuikDeals must notify the Administrator. - C. Both QuikDeals and Maddie are responsible for notifying the Administrator.
- D. QuikDeals has the sole responsibility for notifying the Administrator. Maddie is no longer deemed to be an agent after she terminated her relationship with QuikDeals, so she need do nothing.
Answer: C
Explanation:
Explanation
Under the guidelines of the USA, when Maddie quits her job as a registered agent with QuikDeals, both QuikDeals and Maddie are responsible for notifying the Administrator. Both the broker-dealer and the agent involved are required to notify the Administrator whenever an agent begins or ends her association with the broker-dealer.
NEW QUESTION # 123
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