Series 63 Drill – Administrative Provisions
- April 1, 2025
- Posted by: 'FINRA Exam Mastery'
- Category: Finance
🧾 Series 63 Drill – Administrative Provisions
📘 Sharpen Your Understanding of Administrator Authority and Procedures Under the Uniform Securities Act (USA)
The Series 63 exam focuses heavily on state-level regulation, and a key section is Administrative Provisions under the Uniform Securities Act. Below is a focused drill with definitions, powers, procedures, and practice questions to test your retention of this frequently tested topic.
📍 I. Key Definitions
| Term | Definition |
|---|---|
| Administrator | The official or agency that enforces securities regulations in a state |
| Jurisdiction | Authority over securities transactions and individuals within or affecting the state |
| Cease and Desist Order | Immediate order to stop alleged violation—may be issued with or without a hearing |
| Stop Order | Applies to registration of securities, not individuals |
| Summary Order | Order issued without prior notice or hearing; hearing must be provided upon request |
| Final Order | Conclusive action taken after notice and hearing |
📍 II. Administrator’s Powers
✅ Administrative Powers
- Investigate in-state or out-of-state activities if they affect the state
- Subpoena witnesses and records
- Issue cease and desist orders
- Deny, suspend, or revoke registrations
✅ Limitations
- Cannot impose criminal penalties (but can refer to Attorney General)
- Must grant a hearing within 15 days if requested after summary order
📍 III. Registration Actions
| Action | Applies To | Basis |
|---|---|---|
| Deny | Agents, IAs, BDs, securities | False application, felony conviction, disciplinary record |
| Revoke/Suspend | Any registrant | Same as above + insolvency or failure to maintain bonding |
| Cancel | If registrant is deceased, discontinued business, or cannot be located | |
| Withdraw | Voluntary; becomes effective in 30 days, but administrator can still take action for up to 1 year after |
📍 IV. Key Timeframes
| Event | Time Limit |
|---|---|
| Hearing after summary order | Within 15 days of request |
| Withdrawal of registration | Effective in 30 days |
| Statute of limitations (civil) | 3 years from violation or 2 years from discovery |
| Rescission offer validity | 30 days for client response |
🧠 Practice Drill – 5 Questions
1. Which of the following actions may the Administrator take without prior notice or a hearing?
A) Denial of registration
B) Criminal prosecution
C) Summary order to postpone registration
D) Final order to revoke an agent’s license
✅ Answer: C – Summary orders (e.g., to deny, suspend, or postpone registration) can be issued without prior notice or hearing.
2. A registrant files to withdraw from the state. When does the withdrawal become effective?
A) Immediately
B) 15 days after submission
C) 30 days after submission
D) After administrator approval
✅ Answer: C – Withdrawal becomes effective in 30 days, assuming no action is pending.
3. What can the Administrator NOT do under the Uniform Securities Act?
A) Conduct investigations across state lines
B) Subpoena documents from a broker-dealer
C) Sentence a violator to 3 years in prison
D) Summarily suspend a securities registration
✅ Answer: C – Criminal prosecution must be referred to proper legal authorities; the Administrator cannot impose prison sentences.
4. A registrant dies while under investigation. What happens to their registration?
A) It is revoked
B) It is denied
C) It is canceled
D) It remains until the end of the registration year
✅ Answer: C – Registration is canceled due to death or discontinuation of business.
5. What must occur before a Final Order is issued by the Administrator?
A) Written consent from the registrant
B) A referral to FINRA
C) A hearing opportunity and written findings
D) A court ruling
✅ Answer: C – A Final Order requires prior notice, hearing opportunity, and written findings.
🎯 Study Tip:
Focus on procedural flow:
- Summary Order → Hearing Request (15 days)
- Final Order → Requires notice, hearing, findings
- Withdrawal → 30 days + 1-year post-action window
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