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NASAA Series 63 Uniform Securities Agent State Law Exam

7. Communication with Customers and Prospects: practice questions

Our Series 63 bank has 58 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

Under Regulation Best Interest, a broker-dealer must give a retail customer full and fair written disclosure of material facts about the relationship:

  1. Within 30 days after the trade settles
  2. Before or at the time of the recommendation
  3. Only once a year
  4. Only if the customer asks
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B. Before or at the time of the recommendation — Rule 15l-1(a)(2)(i): disclosure, in writing, prior to or at the time of the recommendation, of material facts about the relationship and conflicts.

Question 2

A customer refuses to give some financial information when opening an options account. Under FINRA Rule 2360, the firm must:

  1. Close the account immediately
  2. Report the customer to FINRA
  3. Approve the account only for uncovered writing, the riskiest strategies
  4. Note the refusal on the customer's records when the account is opened
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D. Note the refusal on the customer's records when the account is opened — Rule 2360(b)(16)(B)(iv): refusal to provide information is noted on the records, and the information provided is weighed with other information in deciding approval.

Question 3

Under FINRA Rule 2360, if the branch manager who approves an options account is not a Registered Options Principal, the account must be approved by a qualified principal within:

  1. 24 hours
  2. 30 calendar days
  3. 90 days
  4. 10 business days
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D. 10 business days — Rule 2360(b)(16)(B): approval must within ten business days be submitted to and approved or disapproved by a Registered Options Principal or General Securities Sales Supervisor.

Question 4

Under FINRA Rule 2210, which is an institutional investor?

  1. A retiree with $1 million in savings
  2. A small business with $5 million in assets
  3. A governmental entity
  4. A family trust
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C. A governmental entity — Rule 2210(a)(4)(B) includes any governmental entity or subdivision, along with Rule 4512(c) persons, large plans, members and registered persons.

Question 5

Under NASAA's statement of policy, a broker-dealer that does not respond to a customer's formal written complaint is:

  1. Acting properly if the complaint lacks merit
  2. Engaging in an unethical practice
  3. Acting properly if it called the customer
  4. Following FINRA rules
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B. Engaging in an unethical practice — Statement of Policy 1.v: failure or refusal to furnish a customer information on reasonable request, or to respond to a formal written request or complaint, is unethical.

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