TheorySeries 63 Practice Test Video
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Q1Under the Uniform Securities Act, which of the following individuals is generally included in the definition of an 'agent' of a broker-dealer?
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✓ Correct answer: A natural person who represents a broker-dealer in effecting securities transactions
Under the USA, an 'agent' is defined as a natural person who represents a broker-dealer or issuer in effecting or attempting to effect purchases or sales of securities; clerical staff and corporate entities are expressly excluded from this definition.
Q2Which of the following entities is EXCLUDED from the definition of a 'broker-dealer' under the Uniform Securities Act?
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✓ Correct answer: An issuer that sells its own securities directly to the public
The USA expressly excludes issuers from the definition of broker-dealer because an issuer selling its own securities is acting as a principal, not as an intermediary for others.
Q3Under the Uniform Securities Act, a person is required to register as an investment adviser if that person, for compensation, engages in which of the following activities?
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✓ Correct answer: Providing advice about securities as a regular part of their business
The USA defines an investment adviser as one who, for compensation and as part of a regular business, advises others about securities; trading for one's own account, pure order execution, and bona fide newspaper publishers are excluded.
Q4An investment adviser representative (IAR) is best described under the Uniform Securities Act as:
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✓ Correct answer: A natural person associated with an investment adviser who makes recommendations or manages client accounts
Under the USA, an IAR is a natural person who is associated with an investment adviser and who makes securities recommendations, manages accounts, or solicits advisory clients, distinguishing the individual from the advisory firm itself.
Q5An agent of a broker-dealer leaves the firm and immediately joins a new broker-dealer in the same state. Under the Uniform Securities Act, how must the registration transfer be handled?
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✓ Correct answer: The agent must file a new application, and the prior registration terminates when the Administrator is notified of the termination
Under the USA, an agent's registration is specific to the sponsoring broker-dealer; upon termination, both the firm and agent must promptly notify the Administrator, and the agent must file a new registration with the new firm before resuming activity.
Q6Under the Uniform Securities Act, which of the following persons is EXEMPT from the definition of 'agent' and therefore not required to register as such?
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✓ Correct answer: An individual who represents an issuer solely in selling exempt commercial paper to institutional buyers in an exempt transaction
The USA excludes from the agent definition individuals who represent an issuer in effecting transactions that are themselves exempt, such as sales of exempt securities like commercial paper to institutional purchasers, because the regulatory concern targets retail public offerings.
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