Pass the FINRA Uniform Securities State Law Series-63 Questions and answers with CertsForce

The bond’s registration is effective for one full year from the effective date of the registration.

Finn has not violated any laws or engaged in any prohibited practices in using the words “Certified Financial Planner” on his business cards. Had he indicated he had been certified or approved by the state, he would have been in violation, but he is allowed to indicate a certification with a professional organization in any advertising literature.

Only Selections II and III describe activities that are not prohibited for a broker-dealer. A broker-dealer can act as a dealer and either sell securities that it owns to a client, as described in Selection II, or buy securities from a client, as described in Selection III, to hold in its own portfolio as long as it discloses to the client that it is doing so. A broker-dealer cannot tell a client that a revenue bond issued by the city of Boston, Massachusetts is almost risk-free since there is a risk of default, especially in the case of a revenue bond, which is not backed by the full taxing power of the city, but only by the revenues generated by a specific project. Moreover, there are other risks involved in bond investments, such as interest rate risk, so Selection I is a prohibited activity. A broker-dealer cannot make a discretionary trade for a client that involves more than just price and time within receiving written authorization prior to executing the trade, so Selection IV also describes a prohibited activity.

“A state cannot require a higher minimum net capital for investment advisers than the amount specified by the Investment Advisers Act of 1940” is a false statement. The Investment Advisers Act of 1940 does not specify a minimum net capital requirement. The Act simply indicates that if an investment adviser is already registered in one state and meeting that state’s minimum net capital requirement, a second state can’t impose a higher net capital requirement on it.

As a director of the firm, Larry would automatically be registered as an investment adviser representative of MoeMoney Investment Advisers. Although directors and officers of the firm are automatically registered as investment adviser representatives, Mary, as a salesrepresentative, would have to apply for her own registration. Curly does not need to be registered since he performs only clerical duties.

Yes. You are guilty of illegal insider trading because you traded on information that was not yet public. Your neighbor and her brother did not execute any trades based on the information, so they’re innocent, as is the agent who executed your purchase order, who had no way of knowing that you had insider knowledge when you placed the order.

The statement that an agent must demonstrate a specific minimum level of financial stability for his registration application to be accepted is false. The Administrator may require an agent to post a bond, but there are no specific minimum financial requisites that must be met. The Administrator also has the right to terminate an agent’s registration if the agent becomes bankrupt. Both the agent and his broker-dealer affiliate are required to inform the Administrator whenever there is a change in the agent’s personal information, such as a name change or a change of address.

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.

Registration by qualification, in its simplest form, requires the issuer to supply voluminous amounts of information about both the firm and its directors, officers, and major shareholders. The state Administrator also has the authority to require even more documentation. It is the least favorite method of registration for obvious reasons.

Yes. The broker-dealer is making a misleading statement in an advertising brochure in order to convince investors to do business with the firm. This is deceitful and misleading, and persons involved in the securities industry are prohibited from making deceitful and misleading statements.