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NASAA Series 63 Uniform Securities Agent State Law Exam

3. Regulation of Broker-Dealers: practice questions

Our Series 63 bank has 28 questions on this topic. Here are 5 of them with answers; the full mock exam draws from every topic, like the real one.

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Question 1

If no denial order is in effect and no proceeding is pending, when does a broker-dealer's registration become effective under the Uniform Securities Act?

  1. On the day the Administrator receives the completed application
  2. Ninety days after filing
  3. When the SEC notifies the state
  4. At noon of the thirtieth day after the application is filed
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D. At noon of the thirtieth day after the application is filed — Section 202(a): registration becomes effective at noon of the thirtieth day after an application is filed, unless the Administrator sets an earlier date or defers it after an amendment.

Question 2

Under the Uniform Securities Act, a broker-dealer is considered insolvent, and its registration can be denied, suspended or revoked on that ground, when:

  1. Its net income fell during the last fiscal year
  2. It has a customer complaint or arbitration claim pending against it
  3. Its liabilities exceed its assets or it cannot meet its obligations as they mature
  4. It borrowed money from a bank to finance an expansion of its branch network
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C. Its liabilities exceed its assets or it cannot meet its obligations as they mature — Section 204(a)(2)(H) defines insolvency in either sense: liabilities exceeding assets, or inability to meet obligations as they mature.

Question 3

Under FINRA Rule 3110, who has final responsibility for proper supervision at a member firm?

  1. The member firm
  2. Each registered representative
  3. FINRA's district office
  4. The state Administrator
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A. The member firm — Rule 3110(a): each member shall establish and maintain a supervisory system, and final responsibility for proper supervision rests with the member.

Question 4

Under SEC Rule 17a-4, how long must a broker-dealer keep its Forms BD?

  1. Three years
  2. Six years, the first two in an easily accessible place
  3. Until the next amendment
  4. For the life of the enterprise and any successor
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D. For the life of the enterprise and any successor — Rule 17a-4(d): Forms BD and the firm's charter and minute books are kept during the life of the enterprise and of any successor enterprise.

Question 5

Under section 203 of the Uniform Securities Act, a state's books-and-records rules for broker-dealers apply:

  1. Without any federal limit, so states may add their own requirements freely
  2. Except as limited by section 15 of the Securities Exchange Act of 1934
  3. Only to firms with no SEC registration of any kind
  4. Only if the firm agrees in writing to be examined by the state
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B. Except as limited by section 15 of the Securities Exchange Act of 1934 — Section 203(a): broker-dealers keep the records the Administrator prescribes, except as provided by section 15 of the 1934 Act. NASAA notes federal law limits state authority on broker-dealer books and records.

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