Series 63 Exam Questions You Must Know

Series 63 Exam Questions You Must Know

The Series 63 exam may be short—but it’s loaded with tricky definitions, exceptions, and scenario-based questions that can catch even experienced professionals off guard. To help you prepare smart, here are must-know questions that reflect the style and substance of what you’ll face on test day.

These are the concepts you cannot afford to miss.

🛡️ 1. Who Must Register Under the Uniform Securities Act (USA)?

Question:
A broker-dealer located in State A has no place of business in State B but conducts trades with three retail clients in State B. Must the firm register in State B?

Answer:
✅ Yes

Broker-dealers must register in any state where they have retail clients, even without a physical office, unless an exemption applies.

🧑‍💼 2. Agent vs. Broker-Dealer: Know the Difference

Question:
Which of the following is considered an agent under the USA?
A. A clerical assistant at a broker-dealer
B. A person who sells exempt securities for an issuer
C. A person who sells non-exempt securities on behalf of an issuer
D. A person who does not receive commissions

Answer:
✅ C

Agents include individuals who effect securities transactions for others. Selling non-exempt securities on behalf of an issuer makes you an agent, regardless of compensation.

🔁 3. Exempt Transactions You Will Be Asked About

Question:
Which of the following transactions is not exempt under the USA?
A. A transaction between issuers
B. An unsolicited non-issuer transaction in a listed security
C. A private placement to five retail investors within a state
D. A transaction with a financial institution

Answer:
✅ C

Private placements are only exempt if no more than 10 retail investors receive offers. In this case, it’s not exempt unless all criteria are met.

👨‍👩‍👧 4. Fiduciary Standard for Investment Adviser Representatives (IARs)

Question:
An IAR makes a recommendation that benefits the adviser more than the client. The client accepts it, unaware of the conflict. What has occurred?

Answer:
✅ Breach of fiduciary duty

IARs must act in the best interest of the client and fully disclose conflicts of interest. Silence is a violation.

🚫 5. Prohibited Practices You Must Recognize

Question:
Which of the following is a prohibited practice under the USA?
A. Using client testimonials with written permission
B. Offering a guarantee against losses
C. Recommending the same stock to several clients
D. Charging higher commissions for low-volume trades

Answer:
✅ B

Guaranteeing performance is explicitly prohibited under the Uniform Securities Act.

📝 6. Key Forms and Deadlines

Question:
An agent is terminated by their broker-dealer. Who must notify the Administrator?

Answer:
✅ Both the broker-dealer and the agent

Form U5 must be filed promptly by the firm, and the agent is also responsible for ensuring proper notice.

📋 7. Statute of Limitations You Need to Know

Question:
Under the USA, what is the statute of limitations for civil liability in securities fraud?

Answer:
✅ The earlier of 3 years from the violation or 2 years from discovery

Know this formula—it’s a common exam question.

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