Series 63 Quick Quiz – Legal Definitions

🧾 Series 63 Quick Quiz – Legal Definitions
📘 Test Your Knowledge of Key Terms for the Uniform Securities Agent State Law Exam

Understanding legal definitions is crucial for the Series 63 exam, which focuses on state securities laws, registrations, and anti-fraud rules. This quick quiz will help you solidify foundational concepts that often appear in tricky questions.

✅ Instructions

• Answer each question without scrolling ahead.
• Check the answers and explanations at the end.

🔢 Quick Quiz (10 Questions)

1. What is an “agent” under the Uniform Securities Act (USA)?
A) Any employee of an issuer
B) An individual who sells securities for a broker-dealer
C) A person managing client portfolios
D) A company underwriting IPOs

2. Which of the following is NOT considered a “security” under the USA?
A) Variable annuity
B) Common stock
C) Fixed insurance contract
D) Investment contract

3. A broker-dealer must register with the state unless:
A) They have no more than 5 clients in that state
B) They do not have a place of business in the state and only deal with institutions
C) They are also a federally covered adviser
D) They only offer advice and don’t sell securities

4. Who is excluded from the definition of an investment adviser under the USA?
A) A person giving advice on real estate
B) A broker-dealer charging for investment recommendations
C) A publisher offering personalized newsletters
D) A lawyer who charges clients based on the size of their investment portfolios

5. What is the definition of a “federal covered security”?
A) Any security that must be registered at the state level
B) A security issued by a registered investment company
C) A security traded only in private placements
D) A municipal bond issued by a state government

6. Under the USA, an offer is considered to have occurred in a state when:
A) The sale settles in that state
B) The check is cashed in that state
C) The offer is directed to and accepted in the state
D) The security is delivered in that state

7. Which of the following is a person under the USA?
A) A minor
B) A deceased individual
C) A government entity
D) A custodial account

8. Who is defined as a “broker-dealer” under the USA?
A) A bank buying securities for its trust clients
B) A person who effects securities transactions for the account of others
C) A lawyer who refers clients to a fund for compensation
D) An IAR working under a federal covered adviser

9. An “issuer transaction” is best defined as:
A) A trade between two retail investors
B) A trade in the secondary market
C) A transaction in which the issuer benefits from the proceeds
D) A transaction with no benefit to the issuer

10. A consent to service of process allows:
A) The registrant to serve subpoenas
B) The Administrator to act on behalf of the registrant
C) Legal papers to be served to the Administrator on behalf of the registrant
D) The registrant to request court relief

🧠 Answer Key with Explanations

1. ✅ B – An agent is an individual who represents a broker-dealer or issuer in the sale of securities.
2. ✅ C – A fixed insurance contract is not a security because it doesn’t involve investment risk.
3. ✅ B – A BD is exempt if they have no place of business in a state and only transact with institutions or other BDs.
4. ✅ A – Advice on non-securities (like real estate) is not considered IA activity.
5. ✅ B – Mutual funds, exchange-listed securities, and Reg D private placements are typically federal covered.
6. ✅ C – An offer is considered made in a state if directed to and accepted in that state.
7. ✅ C – Government entities are considered persons; minors and deceased individuals are not.
8. ✅ B – A BD executes securities trades for their own account or others.
9. ✅ C – An issuer transaction involves the issuer benefiting, such as in a primary offering.
10. ✅ C – It allows legal documents to be served to the Administrator if the registrant is out-of-state.

🎯 Score Yourself

• 9–10 correct: Excellent grasp of legal definitions
• 7–8 correct: Solid base; review missed terms
• 5–6 correct: Revisit registration and terminology sections
• Below 5: Time for a focused legal definitions review

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