Finra Uniform Securities State Law Examination Series-63 Exam Questions

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Total 251 questions
Question 1

Alice Wonder called her broker on Tuesday, August 10th, with a market order to buy 10 calls on the stock of Abbott Laboratories. Under normal conditions, Alice will have to pay for the calls on



Answer : A

If Alice places a market order to buy call options on Tuesday, August 10th, she will have to pay for them on Wednesday, August 11th, the next business day. Options and U.S. government bonds settle on the day after the trade date, or T + 1.


Question 2

When a customer files a complaint with a broker-dealer,

I . the broker-dealer must submit the complaint to the firm's compliance department.

II . the broker-dealer must provide a prompt written response to the complainant.

III . the broker-dealer must temporarily suspend the activities of any agent named in the complaint.



Answer : B

Only Selections I and II are true. When a customer files a complaint with a broker-dealer, the broker-dealer is required to submit the complaint to the firm's compliance department, if any, and to provide the complainant with a prompt written response. It is not necessary to suspend the activities of an agent named in the complaint.


Question 3

on No: 239

A tombstone advertisement is



Answer : B

A tombstone advertisement is an announcement of a new security that may become available for purchase. It is the only type of advertisement that is allowed during the ''cooling off period'' once a firm has filed a registration statement for a new security. It is not an offer to sell the security, an act that is strictly prohibited during this period.


Question 4

While on vacation in Colorado, Massachusetts resident Ms. Jetset meets Mr. Snow, a registered representative with a Colorado broker-dealer, on a ski lift and accepts a dinner engagement with him later that evening, during which he obtains her cell phone number. A week later, while she is lounging around in her Florida beach condo, he calls and interests her in a local software company that is selling its preferred stock to investors and encourages her to buy it. Ms. Jetset tells Mr. Snow she'll think about it and calls him after she returns to her home in Massachusetts to tell him to buy the stock for her and sends him a check via express mail. Later, Ms. Jetset learns that the preferred stock certificate that she received is-and always was-a worthless piece of paper, and that, in fact, no such company ever existed.

Which state Administrator has jurisdiction in this instance?

I . the Administrator of the state of Colorado

II . the Administrator of the state of Florida

III . the Administrator of the state of Massachusetts



Answer : D

All three state administrators have jurisdiction since Mr. Snow made the offer to sell from Colorado, to a person who was in Florida at the time, and Ms. Snow accepted the offer and received the certificate in her home state of Massachusetts. According to NASAA, an Administrator has jurisdiction over all offers and all acceptances of offers to purchase or sell securities if they ''originate from, are directed to, or are accepted in a state.


Question 5

The Uniform Securities Act (USA) is



Answer : B

The Uniform Securities Act (USA) provides a model for states to follow when formulating their own securities laws. It does not, itself, contain any laws.


Question 6

Once a person has filed an application with the Administrator, and in doing so has truthfully disclosed every material fact, how long does the Administrator have after the effective date of the registration to commence a proceeding to deny, suspend, or revoke that person's license based on those facts?



Answer : C

If a person has appropriately and truthfully disclosed every material fact on its application for registration, the Administrator has 90 days after the registration becomes effective to commence a proceeding to deny, suspend, or revoke the license. If the Administrator has known about the fact for longer than this, he may not begin a proceeding against that person according to the Uniform Securities Act.


Question 7

Gazillions is an investment adviser with offices in the state that is registered with the SEC and has $100 billion dollars under management. A client has filed a complaint asserting that the firm has been involved in fraudulent activities. In this case,



Answer : C

If Gazillions is operating as an SEC-registered adviser in a state, it must answer to both the SEC and the state in which the complaint has been filed, even though there is no requirement that it had to register with the state, given that it was a federal covered investment adviser. Allegations of fraud come under the state's authority as well, even if the adviser is a federal covered investment adviser.


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Total 251 questions