Uniform Securities Agent State Law Examination
The Series 63 exam tests candidates on state securities regulations based on the Uniform Securities Act (USA). It is required in most states for individuals who want to conduct securities business within that state. The exam covers the registration of persons and securities, business practices, and the powers of the state Administrator. While there are no specific prerequisites, the Series 63 is typically taken alongside the Series 7 or Series 6 to complete state-level registration requirements.
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Practice Questions
Test your knowledge with these Series 63-style questions. Click an answer to check if you are correct.
1. Under the Uniform Securities Act, which of the following is considered a federal covered security?
Correct: B. Securities listed on national exchanges such as the NYSE or NASDAQ are federal covered securities under NSMIA. Municipal bonds and bank CDs are exempt securities under state law but are not federal covered securities. Securities on regional exchanges are not automatically federal covered.
2. An officer of an issuer sells the company's securities to the public and receives a commission on each sale. Under the USA, this person is:
Correct: B. While officers and directors of an issuer may be excluded from the agent definition, this exclusion does not apply when they receive transaction-based compensation (commissions). Since this officer receives commissions, they are considered an agent and must register with the state.
3. A securities agent wants to share in the profits and losses of a customer's account. Under the USA, this is permitted if:
Correct: C. Agents may share in the profits and losses of a customer's account only if the agent has a financial interest (owns a stake) in the joint account AND has obtained prior written approval from the employing broker-dealer. Customer consent alone or agent experience are not sufficient.
4. The state securities Administrator has the authority to do all of the following EXCEPT:
Correct: C. Only a court of competent jurisdiction can issue an injunction. The Administrator can issue cease and desist orders, deny/suspend/revoke registrations, subpoena witnesses and documents, and investigate violations, but injunctions and jail sentences require court action.
5. An investor purchased securities through a fraudulent transaction. The investor discovers the fraud 18 months after the purchase. How long does the investor have to file a civil suit?
Correct: D. Under the USA, the statute of limitations for civil actions is the earlier of 2 years from discovery or 3 years from the date of the sale. Since the fraud was discovered 18 months after the sale, the investor has 2 years from discovery (up to month 42) but the absolute maximum is 3 years from the sale (month 36). So the investor effectively has until month 36 -- which is 18 months from the date of discovery.
Related Exams
These exams are commonly taken alongside or as alternatives to the Series 63.
Securities Industry Essentials
The foundational exam covering securities industry basics. Required before taking the Series 7 but not specifically required for the Series 63.
General Securities Representative
Most commonly taken alongside the Series 63. The Series 7 provides federal-level qualification while the Series 63 provides state-level registration.
Uniform Investment Adviser Law
An alternative state-level exam for those who want to act as investment adviser representatives rather than broker-dealer agents.
Uniform Combined State Law
Combines the content of the Series 63 and Series 65 into one exam. An efficient alternative if you need both state agent and investment adviser representative registration.