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Series 63 Broker-Dealer and Agent Registration Practice Questions

Official outline
NASAA Series 63 Exam Content Outline
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6
Updated
Nov 3, 2026

  1. Question 1, medium

    A salaried employee of a nonfinancial manufacturing company offers the company's common shares to local retail residents for a selling commission. Which issue is central under a typical state-law analysis?

    • A.The employee probably falls outside the agent definition because the issuer is not a broker-dealer, so state registration is not at issue.
    • B.The employee may be an agent of the issuer and need registration unless a specific statutory exclusion or exemption applies.
    • C.The employee may be a broker-dealer rather than an agent and need firm registration because he earns a commission on the sales.
    • D.The employee may avoid registration as an employee of the issuer, because the issuer is selling its own shares and the commission has no bearing on the analysis.
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    Correct answer: B. The employee may be an agent of the issuer and need registration unless a specific statutory exclusion or exemption applies.

    A person who represents an issuer in selling its securities can be an agent. Registration is needed unless the security or transaction is specifically excluded or exempt.

    • A. Wrong. An agent is an individual who represents a broker-dealer or an issuer in effecting securities transactions, so the issuer's non-broker-dealer status does not remove the employee from the definition. Registration is a real question here.
    • B. The employee may be an agent unless a specific exclusion or exemption applies.
    • C. Wrong. An individual who sells securities on behalf of an issuer is treated as an agent, not as a broker-dealer. Broker-dealer status is aimed at firms or persons trading for others generally. The commission raises an agent-registration question, not a firm-registration one.
    • D. Wrong. Being an employee of the issuer does not by itself excuse the employee from registration. The exclusion for issuer representatives generally applies only to certain exempt transactions and when no commission is paid. A selling commission therefore matters a great deal and weakens the exclusion.

  2. Question 2, easy

    A company files a federal Securities Act registration statement for a public offering and also needs to register the nonexempt securities for sale in a state. The state filing is designed to become effective in coordination with federal effectiveness when legal conditions are met. Which registration method fits?

    • A.Registration by notification, used for seasoned issuers.
    • B.Registration by coordination with the federal filing.
    • C.State registration is waived once federal registration occurs.
    • D.Registration by qualification of the individual salesperson.
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    Correct answer: B. Registration by coordination with the federal filing.

    Registration by coordination ties the state filing to the federal Securities Act registration so that both become effective together, subject to waiting periods and state filing requirements. It is distinct from notification and qualification.

    • A. Notification is a separate method for certain seasoned issuers and is not designed to take effect together with a federal registration.
    • B. Coordination is the method that links a state filing to the federal registration statement and aligns effectiveness.
    • C. A federal registration does not by itself waive state registration of nonexempt securities that are not federal covered securities.
    • D. Securities are registered, not salespeople; agents register separately and this is not a securities registration method.

  3. Question 3, medium

    A nonexempt security is offered directly to an insurance company purchasing for its investment account. Under the traditional Uniform Securities Act, what distinction is most relevant?

    • A.A qualifying transaction with an institutional buyer can be exempt from securities registration even though the security itself is not exempt.
    • B.Any security purchased by an insurance company becomes an exempt security for later resales to other investors as well, once the purchase is completed.
    • C.An institutional buyer is limited to exchange-listed securities, because unlisted nonexempt issues must be registered before any sale to such a buyer.
    • D.Antifraud provisions do not apply to a sale to an institutional buyer, because that transaction is exempt from registration.
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    Correct answer: A. A qualifying transaction with an institutional buyer can be exempt from securities registration even though the security itself is not exempt.

    The Uniform Securities Act exempts certain transactions, such as sales to institutional buyers, from registration without making the security itself exempt. The exemption applies only to the registration requirement for that transaction; antifraud provisions still apply to the sale.

    • A. The institutional-buyer exemption is a transaction exemption; the security remains nonexempt for other sales.
    • B. A purchase by an insurance company does not change the security's status for later resales to other investors.
    • C. Institutional buyers may buy unlisted securities, and the transaction exemption removes the registration requirement for that sale.
    • D. A transaction exemption relieves only the registration requirement for the securities. The antifraud provisions apply to every sale, whether or not the security or the transaction is exempt, and institutional buyers are no exception.

  4. Question 4, medium

    When an agent's employment relationship with a broker-dealer terminates, who is responsible for notifying the Administrator of the termination?

    • A.Only the agent is responsible for notifying the Administrator of the termination
    • B.Only the broker-dealer is responsible for notifying the Administrator of the termination
    • C.Both the broker-dealer and the agent must promptly notify the Administrator of the termination
    • D.Neither party is required to notify the Administrator unless the agent seeks employment with a new broker-dealer within the state
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    Correct answer: C. Both the broker-dealer and the agent must promptly notify the Administrator of the termination

    The Act imposes a shared, independent duty: both the broker-dealer and the agent must promptly notify the Administrator when the employment or associational relationship ends. This dual-notice requirement helps ensure the Administrator's records stay current even if one party is slow or fails to file, and it protects the agent from being deemed still associated with a firm it has left.

    • A. The broker-dealer has an independent notification obligation too; responsibility isn't placed solely on the departing agent.
    • B. The agent also has an independent duty to notify the Administrator; the obligation isn't the broker-dealer's alone.
    • C. Correct. Under the Act, both the broker-dealer and the agent are separately obligated to promptly notify the Administrator when the employment relationship terminates.
    • D. Notification is required promptly upon termination itself; it isn't contingent on or deferred until the agent seeks new in-state employment.

  5. Question 5, hard

    An agent registered only in State C has a long-standing client who is temporarily vacationing in State D, a state where neither the agent nor the broker-dealer is registered. The client calls the agent from State D and asks him to execute a trade in the client's existing account. Which statement best reflects how this is typically handled under state registration exemptions?

    • A.The agent must register in State D before taking any action on the account, because registration in the client's home state does not extend to other states, even for existing clients
    • B.Many states exempt this kind of activity involving an existing client only temporarily present in the state, so the agent may generally proceed without registering in State D
    • C.The trade cannot be executed until the client physically returns to State C, because the agent's registration covers only clients located in the agent's home state at the time of the order
    • D.The exemption applies only if the client is an institutional investor, since individual retail clients must be served by an agent registered in the state where they are located
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    Correct answer: B. Many states exempt this kind of activity involving an existing client only temporarily present in the state, so the agent may generally proceed without registering in State D

    A common exemption (often called the 'snowbird' or existing-customer exemption) permits an agent to service an existing customer who is only temporarily present in another state, without requiring registration in that state, provided the agent and broker-dealer remain properly registered where the client actually resides.

    • A. Registration in State D isn't required before acting. Many states provide an exemption for exactly this kind of temporary-presence, existing-client scenario.
    • B. Correct. Many states exempt an agent's dealings with an existing client who is only temporarily present in the state, allowing the agent to generally proceed without registering in State D.
    • C. There's no requirement that the client physically return to the home state before the trade can be executed, and the agent's registration isn't tied to where the client is at the moment of the order.
    • D. The temporary-presence exemption isn't limited to institutional investors. It commonly covers ordinary existing retail clients.

  6. Question 6, medium

    Agent Maria terminates her employment with Broker-Dealer A and immediately begins working for Broker-Dealer B. Under the Uniform Securities Act, who is responsible for notifying the Administrator of this change?

    • A.Maria, as the registered individual, since the broker-dealers have no notice duty
    • B.The broker-dealers involved, since the agent has no independent notice duty
    • C.Both the broker-dealer(s) and Maria must promptly notify the Administrator
    • D.No notice is required because her registration transfers automatically between firms
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    Correct answer: C. Both the broker-dealer(s) and Maria must promptly notify the Administrator

    Under the USA, when an agent's employment terminates or begins, both the agent and the broker-dealer(s) involved have an obligation to promptly notify the Administrator; registration does not move automatically between BDs.

    • A. Incorrect. The broker-dealers also have notice obligations.
    • B. Incorrect. The agent also has an independent notice obligation.
    • C. Correct.
    • D. Incorrect. Registration doesn't transfer automatically; notice/new registration is required.

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