Series 6 Soliciting Business and New Issues practice questions
5 of the 50 scored Series 6 questions come from Soliciting Business and New Issues (~9% of the exam). Free CertFuel-authored sample questions, common mistakes, and the glossary terms you need to know.
Soliciting Business and New Issues is part of Function 1: Seeks Business, one of the four FINRA Series 6 functional areas. This topic carries roughly 9% of the exam (5 of the 50 scored questions). The full function weight is 24% (12 scored questions).
Series 6 questions on prospectus requirements, the new-issue process, exempt securities, Regulation D private placements, and prospectus delivery rules.
These are the exam traps that pull the highest miss rates from Series 6 candidates on Soliciting Business and New Issues questions:
- Confusing the preliminary (red herring) prospectus with the final prospectus
- Forgetting that Rule 482 omitting prospectuses for mutual funds still require a statutory prospectus before or with the sale
- Mixing up the 25-day vs 40-day vs 90-day post-effective prospectus delivery windows for different issuer categories
8 hand-checked Series 6 sample questions on Soliciting Business and New Issues, sampled from the CertFuel practice bank. Click any answer choice to reveal the explanation and the "why it matters" note. Every question is multiple choice (A/B/C/D, one correct answer) and matches the format of the real FINRA exam.
A customer calls a broker-dealer and requests in writing a copy of the preliminary prospectus for a pending registered offering in which the broker-dealer is participating. The broker-dealer must:
Correct answer: D. The rule requires reasonable steps to furnish either the preliminary or final prospectus to any person who requests one in writing. This applies alongside the separate delivery obligations triggered by confirmations of sale.
Why not the others?
- A (Ignore the request because the customer has not yet purchased the security): The prospectus delivery obligation requires reasonable steps to furnish a prospectus to any person who requests one in writing, whether or not the person has already purchased.
- B (Forward the request to the SEC for processing): Prospectus delivery is the broker-dealer's obligation, not an SEC task. The SEC does not fulfill individual prospectus requests on behalf of broker-dealers.
- C (Decline the request until the registration statement becomes effective): A preliminary prospectus is by definition the pre-effective red herring. Delivery of the preliminary prospectus during the cooling-off period is one of its primary uses.
Written request for prospectus. This pattern shows up repeatedly on the Series 6, and recognizing it cold is what separates first-try passes from retests.
A customer subscribes to a new open-end mutual fund registered on Form N-1A. The fund's registration statement is filed on March 1, and the SEC declares it effective on March 25. The customer purchases shares on March 26. Which of the following statements about document delivery is most accurate?
Correct answer: D. For purchases following effectiveness, the final prospectus must be delivered no later than with the trade confirmation. This is the standard timing rule for registered offerings.
Why not the others?
- A (The red herring delivered to the customer on March 15 satisfies all prospectus delivery obligations for the purchase): The red herring is a cooling-off document only. Once the registration is effective and the customer purchases, the final prospectus must be delivered; the red herring does not substitute.
- B (No prospectus needs to be delivered because the customer already received the preliminary version): Delivery of the final prospectus is required. Prior receipt of the red herring does not waive the obligation to deliver the final prospectus.
- C (The final prospectus delivery can be deferred until the customer's next annual account statement): Annual statements are unrelated to prospectus delivery. The final prospectus delivery deadline is tied to the trade confirmation, not to account statement cycles.
Final prospectus delivery timing in practice. This pattern shows up repeatedly on the Series 6, and recognizing it cold is what separates first-try passes from retests.
A broker-dealer participates in an IPO of an existing reporting issuer (a company that already files periodic reports with the SEC). The 48-hour preliminary prospectus delivery requirement:
Correct answer: B. The 48-hour rule applies only to IPOs of non-reporting first-time issuers. An existing Exchange Act reporting company already produces public disclosure, so the 48-hour lead time does not apply to its offerings under the rule.
Why not the others?
- A (Applies to this offering because every IPO is covered by the 48-hour rule): Not every IPO is covered by the 48-hour rule. The rule targets non-reporting first-time issuers specifically.
- C (Applies to this offering because the customer did not previously own the security): New ownership by the customer is not the trigger for the 48-hour rule. The trigger is the issuer's non-reporting status.
- D (Does not apply because preliminary prospectuses are never required for IPOs): Preliminary prospectuses are commonly used in IPOs to solicit indications of interest. The 48-hour rule simply targets a specific category of IPO issuer.
48-hour rule scope (reporting vs non-reporting). This pattern shows up repeatedly on the Series 6, and recognizing it cold is what separates first-try passes from retests.
A broker-dealer has 7 registered persons. It has just hired 3 new registered representatives, all of whom worked at firms that were expelled from an SRO for sales practice violations within the last three years. The firm's remaining 4 reps have clean industry histories. The firm is:
Correct answer: D. For firms with 5-9 registered persons, the trigger is 40% or more of registered persons from disciplined firms. Three out of seven is approximately 43%, which exceeds the 40% threshold and makes the firm a taping firm.
Why not the others?
- A (not subject to any special supervisory tape-recording requirement, because it has fewer than 10 registered persons.): Small firms are not exempt from the taping rule. For firms with 5-9 registered persons, the trigger is 40% or more of registered persons from disciplined firms. This firm has 3 of 7, which is roughly 43%.
- B (subject to the taping requirement only if 4 or more of its registered persons came from disciplined firms.): The fixed "4 or more reps" threshold applies to mid-size firms with 10-19 registered persons, not to firms in the 5-9 range. A firm with 7 reps is evaluated on the 40% threshold.
- C (subject only to enhanced written supervisory procedures and not to actual call recording.): A firm that crosses the threshold must tape record calls with customers in addition to adopting enhanced written supervisory procedures. Procedures alone are not sufficient.
5-9 rep firm 40% threshold. This pattern shows up repeatedly on the Series 6, and recognizing it cold is what separates first-try passes from retests.
A customer who submitted an indication of interest for a new issue two weeks ago has moved and changed phone numbers. The SEC has now declared the registration effective at the final public offering price. The broker-dealer's most appropriate next step is to:
Correct answer: B. Re-confirmation is required. Indications of interest are non-binding, and the BD must reach the customer after effectiveness to confirm the order at the final price before executing a purchase.
Why not the others?
- A (Execute the purchase based on the original indication of interest and mail the confirmation to the customer's address of record): Executing based on the original indication of interest is prohibited. The customer must be re-contacted after effectiveness and must actively confirm the order before any execution.
- C (Automatically cancel the indication of interest because the customer is not reachable on the effective date): There is no automatic cancellation trigger tied to reachability. The indication remains non-binding, and the BD should attempt to re-contact the customer before treating it as closed.
- D (Treat the indication as an unconditional order and debit the customer's account for the purchase amount): An indication of interest is not an unconditional order. The BD cannot debit the customer's account without a confirmed order following re-contact.
Re-confirmation requirement after effectiveness. This pattern shows up repeatedly on the Series 6, and recognizing it cold is what separates first-try passes from retests.
A married couple owns a primary residence worth $2,200,000 (with no mortgage), a brokerage account worth $400,000, and savings of $150,000. They have no other assets or liabilities. Based solely on the net-worth test for accredited investor status, which of the following is correct?
Correct answer: C. The primary residence is excluded from the $1,000,000 net-worth test. Excluding the $2,200,000 home leaves $550,000 of brokerage and savings, which is below the $1,000,000 threshold.
Why not the others?
- A (They qualify as accredited because their total net worth exceeds $1,000,000.): Total net worth including the residence does exceed $1,000,000, but the primary residence is excluded from the calculation. Excluding it leaves $550,000, which is below the threshold.
- B (They qualify as accredited because they own a residence worth more than $1,000,000.): Owning a residence worth more than $1,000,000 does not qualify a couple as accredited. The primary residence is expressly excluded from the net-worth test.
- D (They do not qualify as accredited because non-retirement assets cannot be counted toward the net-worth test.): Non-retirement brokerage and savings assets do count toward net worth. The disqualifier in this scenario is the residence exclusion, not the type of account.
Accredited investor net-worth test excludes primary residence. This pattern shows up repeatedly on the Series 6, and recognizing it cold is what separates first-try passes from retests.
The Securities Act's general antifraud provision applies to fraud in:
Correct answer: D. The Securities Act's general antifraud provision applies to every securities transaction, including exempt securities (government, municipal, commercial paper, nonprofit), Regulation D private placements, and intrastate offerings. Exempt from registration does not mean exempt from antifraud.
Why not the others?
- A (registered offerings only; exempt securities are outside its scope.): This is a common trap. The Securities Act's general antifraud provision covers all securities transactions, not just registered offerings. The antifraud reach is broader than the registration reach.
- B (offerings of equity securities only; fixed-income offerings are governed by separate provisions.): The Securities Act's general antifraud provision does not distinguish between equity and debt. It applies to fraud in any securities transaction regardless of instrument type.
- C (secondary market transactions only; primary offerings are governed by the registration requirements.): The registration requirements govern registration in primary offerings, but the Securities Act's general antifraud provision applies to primary offerings as well as secondary transactions.
Section 17 scope covers all securities transactions. This pattern shows up repeatedly on the Series 6, and recognizing it cold is what separates first-try passes from retests.
The underwriter's investigation of the issuer's financials, business operations, management, and legal matters before a registration statement is filed is known as:
Correct answer: C. Due diligence is the underwriter's investigation of the issuer covering financials, business operations, management, and legal matters. It supports the underwriter's reasonable investigation defense against investor lawsuits for material misstatements or omissions in the registration statement.
Why not the others?
- A (Registration): Registration is the SEC filing process itself. The pre-filing investigation that feeds into the registration statement is called due diligence.
- B (Qualification): Qualification is a state-law blue-sky registration method for issuers with no prior SEC registration, not the underwriter's pre-filing investigation.
- D (Syndication): Syndication is the process of forming an underwriting syndicate. It describes sharing distribution risk among multiple underwriters, not the investigation of the issuer.
Due diligence definition. This pattern shows up repeatedly on the Series 6, and recognizing it cold is what separates first-try passes from retests.
The 4 glossary terms most likely to appear on Series 6 Soliciting Business and New Issues questions. Click any term for the full definition, example, and testing pattern.
Prospectus
The SEC-required formal disclosure document for a securities offering, mandated by the Securities Act of 1933. It contains the investment ob...
Public Offering Price
The Public Offering Price (POP) is the price at which a mutual fund sells its shares to investors. For a load fund, POP equals Net Asset Val...
Regulation D
SEC regulation providing exemptions from securities registration requirements for private placement offerings. Primary rules include Rule 50...
Private Placement
An offering of unregistered securities to a limited group of investors that is exempt from SEC registration requirements, primarily conducte...
Other topics in Function 1: Seeks Business (24% of the exam, 12 scored questions). Practice each one to round out the function:
Looking for everything? Head to the Series 6 practice questions hub for all 13 topics, or take the 55-question full practice test.