Questions for the SERIES-63 were updated on : Jan 05 ,2026
Which of the following would a firm not be expected to provide to the Administrator when
registering an issue of securities with the state?
D
Explanation:
The firm will be expected to provide all of the above-sales and advertising materials to be used in the
offering, the agreement between the issuing firm and its underwriters, and the agreement among
the underwriters themselves.
Which of the following laws deals with identity theft protection?
D
Explanation:
Regulation S-P was enacted by the SEC to deal with identity theft. The law requires financial
institutions to provide their clients with a statement of its privacy policies and practices and prohibits
the disclosure of nonpublic personal information about even a prospective client to a nonaffiliated
third party unless certain conditions are met, including giving the client or prospective client the
right to opt out of the disclosure.
Under the guidelines of the Bank Secrecy Act (BSA), the Treasury Department now requires broker-
dealers to obtain and keep certain information relating to clients that make or receive funds transfers
that involve
A
Explanation:
Under the guidelines of the BSA, the Treasury Department now requires broker-dealers to obtain and
keep information relating to clients that make or receive funds transfers that involve $3,000 or more.
If the transaction is a cash transaction over $10,000, the same rules apply, and a Currency
Transaction Report must be filed with FinCEN. Under the USA Patriot Act, if the broker-dealer thinks
that a transaction of $5,000 or more is suspect, the broker-dealer must file a suspicious activity
report (SAR.)
As an agent, which of the following statements about the Securities Investor Protection Corporation
(SIPC) can you legitimately make to your client?
B
Explanation:
The statement that you can legitimately make about the SIPC to your client is that it was established
to restore funds to investors when the brokerage firm they have been using is bankrupt or in financial
distress. The SIPC does not insure investors against losses in the stock and bond markets like the FDIC
does bank deposits, and it does not combat fraud.
Which of the following statements regarding an open-end investment company is not true?
D
Explanation:
The shares of an open-end investment company are not bought and sold on exchange floors. An
open-end investment company is a mutual fund, and its shares are bought and sold through the
company. The price per share will be either at net asset value as is the case with a no load fund, or
above net asset value, as is the situation with a load fund, when the price is equal to net asset value
+ the sales charge (load.) Open-end investment company shares are federal covered and, as such, do
not need to be registered with the state.
Registration by coordination is provided for by which of the following federal securities acts?
A
Explanation:
The Securities Act of 1933 is the Act that requires that all new securities be registered and provides
for registration by coordination.
In accordance with the National Securities Markets Improvement Act of 1996, which of the following
is a federal covered adviser and, therefore, exempt from registering with the state Administrator?
I . An adviser who does business in 26 states.
II . An adviser who manages the portfolio of a mutual fund that is registered with the SEC.
III . An adviser with $35 million in assets under management
C
Explanation:
The advisers described in Selections II and III are federal covered advisers and, therefore, exempt
from registering with the state Administrator. An adviser who advises a registered investment
company, as in Selection II, and an adviser with over $30 million in assets under management, as in
Selection III are exempt. In order to be exempt from registration, the adviser in Selection I would
have to be doing business in more than 30 states.
Layered Corporation wants to issue a bond that will have warrants attached. Each warrant gives the
holder the right to buy 5 shares of Layered’s common stock at a price stipulated on the warrant.
In this instance, Layered must file to register which of the following securities with the state?
I . the bonds
II . the warrants
III . the common stock
D
Explanation:
If Layered issues a bond with warrants attached that give the holder the right to buy shares of its
common stock, Layered must register all three securities. The bond is being offered for sale with the
warrants attached, so both the bond and the warrant are being offered for sale and must be
registered.
Furthermore, the Uniform Securities Act stipulates that the “sale or offer for sale of the right” to buy
another security “is considered to include an offer of the other security.” Therefore, offering the
warrant for sale is effectively an offer to sell the stock as well, so the stock must be registered.
To say a security is “exempt,” means that
I . it is exempt from the state’s anti-fraud laws.
II . it is exempt from state registration requirements.
III . any transaction involving it is considered to be an exempt transaction.
D
Explanation:
To say a security is “exempt” means only that the security is exempt from state registration
requirements. It is not exempt from the state’s anti-fraud laws and may or may not be part of an
exempt transaction. That is defined by the transaction.
The Administrator may not introduce a stop order to deny, revoke, or suspend the effective
registration of a security based on facts that were disclosed during the registration process unless he
does so within
A
Explanation:
The Administrator may not introduce a stop order against the registration of a security based on facts
that were disclosed during the registration process unless he does so within 30 days.
The Administrator of a state will deny the registration of a security if
I . the mandated filing fee has not been paid.
II . the compensation of the underwriters is excessive.
III . the registration statement is incomplete.
IV . the issuer is registering the security through the registration by coordination process and has not
complied with all the stipulated requirements.
A
Explanation:
The Administrator of a state will deny the registration of a security under any of the situations
described in Selections I, II, III, and IV-if the mandated filing fee has not been paid; if the
compensation of the underwriters is excessive; if the registration statement is incomplete; or if the
issuer is attempting to use registration by coordination and has not complied with all the stipulated
requirements of that process.
Which of the following would not be found in a tombstone advertisement?
A
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.
on No: 239
A tombstone advertisement is
B
Explanation:
A tombstone advertisement is an announcement of a new security that may become available for
purchase. It is the only type of advertisement that is allowed during the “cooling off period” once a
firm has filed a registration statement for a new security. It is not an offer to sell the security, an act
that is strictly prohibited during this period.
Which of the following may be given to prospective investors during the “cooling off period?”
A
Explanation:
During the “cooling off period” prospective investors may be given only a tombstone advertisement
for the security.
If an issuer registers securities with the state, how long can the documentation supplied in the
registration statement for those securities be incorporated by reference only into a registration
statement for future securities the issuer wants to offer for sale?
C
Explanation:
Once an issuer has registered securities with the state, the documentation supplied in that
registration statement can be incorporated into the registration statement for future securities the
issuer wants to offer for sale by reference only for a period of five years.