📘 Series 66 Vocabulary You Need to Know

To succeed on the Series 66 exam, candidates must master a wide range of regulatory, financial, and legal terminology. This vocabulary is not just for memorization—it forms the foundation of real-world applications in investment advisory and securities law. Below is a list of essential terms you’re expected to know.

🧠 Fiduciary

A fiduciary is legally obligated to act in the best interest of another party. Investment advisers owe this duty to their clients.

🕴️ Agent

An individual who represents a broker-dealer or issuer in the sale or purchase of securities. Agents must register at the state level.

🏢 Broker-Dealer (BD)

A person or firm in the business of buying and selling securities. Broker-dealers may act as agents or principals.

📊 Investment Adviser (IA)

A person or firm that provides investment advice or analysis for a fee. Investment advisers must register with the SEC or state authorities depending on assets under management.

📜 Uniform Securities Act (USA)

A model law created to guide states in regulating securities activities within their jurisdiction. It forms the legal backbone of the Series 66 exam.

🌐 Blue Sky Laws

State laws that regulate the offering and sale of securities to protect investors from fraud. Series 66 emphasizes the differences between federal and state oversight.

✍️ Discretionary Authority

The authority granted by a client allowing the adviser or agent to execute transactions without prior client approval for each trade.

🛡️ NASAA (North American Securities Administrators Association)

The organization responsible for creating the Series 66 exam. It represents state securities regulators.

💼 Prudent Investor Rule

A standard requiring fiduciaries to manage portfolios with the care, skill, and caution a prudent investor would use.

🔗 Solicitor

A person who solicits investment advisory services on behalf of an adviser and receives compensation. Disclosure requirements apply.

🔍 Regulation D

A federal exemption allowing companies to raise capital through private securities offerings without SEC registration.

💸 Accredited Investor

An individual or entity that meets specific financial criteria and is eligible to invest in certain unregistered securities.

⛔ Statutory Disqualification

A disqualifying event—such as a felony or regulatory violation—that bars an individual from associating with a broker-dealer or investment adviser.

📄 Form ADV

The form used by investment advisers to register with the SEC or state. It discloses business practices, fees, and conflicts of interest.

🚫 Cease and Desist Order

An order issued by regulators requiring a firm or individual to stop an illegal or unethical activity immediately.

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