An agent and a customer agree over the phone that the agent will pick the security, the amount, and the action for trades in the account going forward. Before the agent may begin exercising that authority, the customer must provide:

B. prior written authorization for the agent (or firm) to exercise discretion

A. nothing further, because the oral agreement is sufficient for discretion

C. a verbal confirmation repeated back on a recorded line

D. written authorization only after the first ten discretionary trades

A customer instructs an agent to buy 500 shares of a specific stock "sometime today, whenever you think the price looks good." The agent waits a few hours and then executes. This instruction is best described as:

B. limited time-and-price discretion that does not require written authorization

A. full discretion requiring prior written authorization

C. a prohibited practice because no order may be delayed

D. churning, because the agent chose the execution time

A customer mails a check to an agent made payable to a third party by mistake, then later asks the agent to hold some stock certificates "for safekeeping" in the agent's desk. Under state law, the agent should:

B. promptly forward the misdirected check and decline to take personal custody of the certificates

A. deposit the check personally and lock the certificates in the desk

C. cash the check and issue the customer a personal IOU

D. hold both the check and certificates until the next account review

When a broker-dealer acts as a principal and sells a security to a customer out of its own inventory, the markup it charges should be:

B. fair and reasonable in relation to relevant market factors, and disclosed appropriately

A. unlimited, because principal trades are exempt from fairness standards

C. hidden from the customer to protect the firm's trading strategy

D. identical for every customer regardless of the size or nature of the trade

On a trade confirmation, a broker-dealer must disclose whether it acted as an agent (broker) for the customer or as a principal (dealer) trading for its own account. The reason this capacity disclosure matters most is that:

B. it reveals a potential conflict of interest and how the firm is compensated on the trade

A. it determines the settlement date of the transaction

C. it changes the tax character of the customer's gain or loss

D. it is required only for exempt securities

An agent, frustrated that a client keeps hesitating, tells the client: "Just buy it now. If it goes down in the first month, I will personally cover any loss out of my own pocket." This statement is:

B. a prohibited practice (guaranteeing a customer against loss)

A. permitted, because the agent is using personal funds, not the firm's

C. permitted if the client signs an acknowledgment

D. permitted only for accredited investors

An agent wants to share in the profits and losses of a customer's account. Under the model conduct rules, this is generally permissible only if:

B. the firm and customer give written authorization and sharing is proportional to the agent's own contribution

A. the customer is a family member, with no other conditions

C. the agent contributes nothing but accepts a larger share of profits

D. the account has been open for at least one year

An agent executes several trades in a customer's non-discretionary account without speaking to the customer first, reasoning that the trades were clearly good ideas. This is:

B. an unauthorized transaction, a prohibited practice

A. acceptable, because the agent acted in the customer's interest

C. acceptable if the trades were profitable

D. acceptable as long as the customer is notified within the month

A customer offers to lend an agent money to help the agent through a personal cash crunch. Under typical firm and state conduct standards, the agent should understand that borrowing from a customer is:

A. always strictly prohibited under all circumstances

B. generally restricted, permissible only under narrow conditions such as a lending-business relationship or close family ties, with firm approval

C. freely permitted as a private matter outside the firm's concern

D. permitted only if the interest rate is below market

An agent begins selling a private investment away from the firm, arranging the transactions and collecting compensation without telling the broker-dealer. This activity is best described as:

B. selling away (private securities transactions outside the firm), a prohibited practice without firm knowledge and approval

C. acceptable because the product was not offered by the firm

D. acceptable because the agent disclosed it to the customers

Two agents arrange to trade the same thinly traded security back and forth between their customers to create the appearance of active trading and nudge the price higher. This conduct is:

B. a manipulative and fraudulent practice (creating a false appearance of activity)

C. permissible if both customers consent

D. permissible because no exchange rule was broken

An agent learns material nonpublic information about a pending corporate event from a friend on the inside and then buys the stock for personal and customer accounts. This is:

B. prohibited insider trading (trading on material nonpublic information)

A. acceptable because the agent did not work at the company

C. acceptable if the agent shares the profits with customers

D. acceptable because tips from friends are not regulated

An agent temporarily deposits a customer's funds into the agent's personal bank account, intending to forward them to the firm "in a day or two." This is best characterized as:

B. commingling of customer and personal funds, a prohibited practice

A. an acceptable convenience as long as the funds are forwarded promptly

C. acceptable if the agent keeps a written log

D. acceptable for small dollar amounts only

An agent recommends a complex, illiquid product to a customer whose stated objective is short-term liquidity and capital preservation, mainly because the product pays the agent a higher commission. The agent has:

B. made an unsuitable recommendation driven by a conflict of interest

A. acted properly, because higher commission means a better product

C. acted properly if the customer signs a risk disclosure

D. acted properly because the customer can always sell later

A social media post drafted by an agent reads: "Our growth fund returns at least 8% every year, guaranteed." The problem with this communication is that it:

B. guarantees performance, which is prohibited in communications with the public

A. omits the agent's contact information

C. uses the word fund instead of portfolio

D. was posted on social media rather than emailed

An advertisement highlights a fund's best three-year stretch of returns but leaves out the years of losses that followed. Even if every number shown is accurate, the ad is problematic because it is:

B. misleading by omission, since cherry-picked data creates a false impression

A. too long for an advertisement

C. fine, because all stated figures are true

D. fine, because past performance is always irrelevant

A prospecting email implies that a state securities Administrator has reviewed and "approved" the agent's recommended investment. This is:

B. prohibited, because implying that a regulator approved or endorsed the security or the agent is misleading

A. acceptable, because registration is a form of approval

C. acceptable if the security is in fact registered

D. acceptable for exempt securities only

Before a customer can trade on margin, the firm generally must obtain:

B. a signed margin agreement disclosing the terms and risks of borrowing

A. nothing beyond the new account form

D. a guarantee from the Administrator

An agent wants to use a personal social media account to post about specific securities recommendations to prospects. The most accurate statement is that:

B. business-related communications are subject to the same content standards and firm supervision regardless of the platform

A. personal accounts are exempt from communication rules

C. social media posts never count as communications with the public

D. only emails are subject to supervision, not posts

An agent tells a prospect that a particular bond is "completely risk-free and can never lose value." This statement is:

B. misleading, because it misrepresents the risks of the security

A. acceptable for government bonds only

C. acceptable if the agent personally believes it

D. acceptable if said verbally rather than in writing

A firm sends a mass email blasting a high-risk, speculative product to its entire customer list, including many conservative retirees. The chief concern with this communication is that it:

B. pushes a speculative product broadly without regard to whether it suits the recipients

A. used email rather than direct mail

C. was too short to be effective

With respect to advertising and sales literature, broker-dealers are generally expected to:

B. maintain records of communications and have them subject to firm review

A. discard all communications immediately after use

C. file every email with the Administrator before sending

D. keep records only for communications that mention price

When an agent recommends a security in which the firm has a financial interest (for example, the firm is a market maker or holds the security in inventory), the communication should:

B. disclose the firm's interest so the customer understands the potential conflict

A. never mention the firm's interest, to avoid confusing the customer

C. disclose the interest only if the customer asks twice

D. omit the interest because it is proprietary

During a cold call, a prospect clearly states, "Do not call me again." The agent's proper response under conduct standards is to:

B. honor the request and record it so the prospect is not contacted again

A. call back the next day with a better pitch

C. transfer the lead to a colleague to call instead

D. ignore the request unless it is made in writing

Under the Uniform Securities Act, an "agent" is best defined as:

A. any individual who represents a broker-dealer or issuer in effecting securities transactions

B. the broker-dealer firm itself

C. any partnership or corporation that trades securities

D. the state securities Administrator

Which of the following is generally EXCLUDED from the definition of a "broker-dealer" under state law?

B. An agent, an issuer, or a bank acting within its traditional functions

A. A firm with an office in the state soliciting retail customers

C. A firm that makes a market in over-the-counter securities for state residents

D. A firm that holds customer accounts for state residents

A broker-dealer has no place of business in a state and deals there only with existing customers who are temporarily present (such as a client on vacation). With respect to that state, the firm may be:

B. excluded from the broker-dealer definition in that state under the no-place-of-business and limited-clientele provision

A. required to register regardless of the limited contact

C. permanently barred from the state

D. required to register the client instead of the firm

An individual representing a broker-dealer wants to solicit securities transactions from residents of a state. Generally, that individual must:

A. register as an agent in that state (unless an exclusion applies)

B. register only after the first sale is completed

C. never register, because the firm's registration covers all its agents automatically

D. register only with the SEC, not the state

When an agent leaves one broker-dealer to join another, who is generally responsible for notifying the state Administrator of the change?

B. the agent, the former employer, and the new employer

D. no one, because the registration transfers automatically

An individual represents an issuer solely in effecting transactions in certain exempt securities or in exempt transactions. With respect to that activity, the individual may:

B. be excluded from the definition of agent for that activity

A. always be required to register as an agent

C. register only as a broker-dealer

D. be barred from representing any issuer

After an agent is registered, the agent's reported information (such as a new residential address or a reportable disciplinary or legal event) generally must be:

B. kept current through prompt amendments to the agent's registration record

A. updated only at the annual renewal

C. reported only if the customer complains

D. ignored, because the original filing is permanent

When an agent's employment with a broker-dealer ends, the firm generally must:

B. notify the appropriate regulator of the termination through the required filing

A. do nothing, because terminations are private personnel matters

C. wait until the agent joins a new firm before reporting

D. report only if the agent was fired for cause

A broker-dealer's obligation to supervise its agents primarily means that the firm must:

B. establish and enforce reasonable written procedures to oversee agent conduct and detect violations

A. guarantee that no agent ever makes a mistake

C. review only trades larger than a fixed dollar amount

D. supervise agents only during their first year

With respect to records, a state-registered broker-dealer is generally expected to:

B. make and preserve required books and records and make them available for inspection

A. keep no records, relying on customers to retain their own confirmations

C. keep records only for accounts that lost money

D. destroy records immediately after each transaction settles

A state Administrator may, consistent with federal limits, require a broker-dealer to meet certain conditions of registration. These may include:

A. minimum net capital or surety bonding requirements within applicable limits

B. a personal guarantee from every customer

C. a promise never to lose money on a trade

D. a requirement to register each customer individually

An agent registered in State A wants to begin soliciting customers who reside in State B. Before doing so, the agent generally must:

B. become registered (or qualify under an exclusion) in State B as well

A. do nothing, because one state registration covers the whole country

C. register only the firm in State B, not the agent

D. obtain approval from State A to leave

A back-office employee of a broker-dealer performs only clerical and ministerial functions and never solicits or effects securities transactions with the public. With respect to agent registration, this person is generally:

B. not an agent for registration purposes, because clerical/ministerial activity is not effecting transactions

A. required to register as an agent like everyone else at the firm

C. required to register as a broker-dealer

D. required to register as an investment adviser

Which of the following best describes the core of the "investment adviser" definition?

A. A person who, for compensation, is in the business of advising others about securities

B. Any person who buys or sells securities for their own account

C. A person who only executes trades and gives no advice

D. A government securities issuer

A lawyer gives investment-related comments that are solely incidental to the practice of law and receives no special compensation for investment advice. With respect to the investment adviser definition, this professional is likely:

B. excluded, because the advice is incidental to their profession and not separately compensated

A. an investment adviser who must register immediately

D. a federal covered adviser by default

An "investment adviser representative" (IAR) is generally:

B. an individual associated with an investment adviser who makes recommendations, manages accounts, or solicits advisory services

C. any customer of an advisory firm

D. a broker-dealer that also gives advice

The clearest line between an agent of a broker-dealer and an investment adviser representative is that:

B. agents represent a broker-dealer (typically transaction-based), while IARs represent an investment adviser (advice-based)

A. agents give advice for a fee, while IARs only execute trades

C. agents and IARs are identical terms

D. only IARs can be paid any compensation

An individual begins soliciting clients for an investment adviser and will determine the advice given to those clients. With respect to state law, this individual generally must:

A. register as an IAR (unless an exclusion applies) before engaging in that activity

B. register only as an agent of a broker-dealer

C. avoid all registration because advisers are unregulated

D. register the clients with the Administrator

Which of the following would most likely be considered a "security" under the Uniform Securities Act?

B. An investment contract in which investors pool money expecting profits from the efforts of others

A. A fixed, whole-life insurance policy with guaranteed cash value

C. A commodity such as physical gold held for personal use

D. A residential mortgage on the buyer's own home

Which of the following is generally an EXEMPT security under state law (exempt from registration as a security)?

B. A U.S. government or municipal security

A. A start-up's common stock sold broadly to the retail public

C. A speculative private company's promissory notes sold door to door

D. Any security an issuer simply labels as exempt

Which of the following is most likely an EXEMPT transaction under state law?

B. A private placement to a limited number of buyers without general advertising

A. A general solicitation of unsophisticated retail investors

C. A nationwide television campaign selling unregistered stock

D. A cold-calling blitz to the general public

Which of the following is a power the state securities Administrator generally has?

B. Conducting investigations, issuing subpoenas, and inspecting the records of registrants

A. Sending violators directly to prison without any court involvement

C. Guaranteeing investor profits on registered securities

D. Setting interest rates for the national economy

Before an Administrator denies, suspends, or revokes a registration in a final order, the affected person is generally entitled to:

B. notice and an opportunity for a hearing

A. nothing, because the Administrator's decisions are not reviewable

D. a guarantee that no action will ever be taken

A customer who was sold a security through a material misrepresentation may have, under state law, the right to:

B. a civil remedy that can allow recovery of the investment (rescission-type relief), subject to applicable conditions

A. no recourse, because all securities sales are final

C. an automatic doubling of all gains

D. free securities from the Administrator

The state Administrator's antifraud authority generally applies to:

B. fraud in connection with the offer or sale of securities, including many exempt securities and transactions

A. only securities that are required to be registered

C. only transactions over a fixed dollar amount

D. only transactions involving out-of-state issuers

An offer to sell a security is directed into a state and received there by a prospective buyer. With respect to that offer, the state Administrator generally:

B. has jurisdiction, because an offer directed into and received in the state is within the Administrator's reach

A. has no authority unless a sale is actually completed

C. has authority only if the buyer is a resident

D. has authority only over the issuer's home state

An agent reasonably believes that an elderly client is being financially exploited by a relative who is pressuring her into large, out-of-character withdrawals. Under the model rules on senior and vulnerable-adult exploitation, the agent or firm is permitted to:

B. notify the state Administrator and adult protective services and place a temporary hold on the suspicious disbursement

A. do nothing, since acting on a suspicion would breach client confidentiality

C. freeze the account permanently and refuse all further contact with the client

D. lend the client money to make up for the suspected losses

Series 63 practice exam · 51 questions · NASAA state law

Series 63 practice exam

A full-length 51-question Series 63 practice exam written to mirror the NASAA Uniform Securities Agent State Law format. Explanations after every question and a per-topic breakdown at the end. CertFuel's full Series 63 app generates fresh practice exams from a 2,100-question adaptive bank, plus FSRS flashcards, lessons, and a live exam-readiness score.

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One practice exam, then the full bank in the app

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This page is a single 51-question Series 63 practice exam, fixed order, with explanations after each question. Useful for a one-off check, a feel for question difficulty, or a focused review session. The real NASAA Series 63 has 60 scored questions plus 5 unscored pretest questions, a 75-minute limit, and a 72% passing score (43 of 60).

The CertFuel app is where you actually prep: a 2,100-question adaptive Series 63 bank that resurfaces your weak topics, FSRS spaced-repetition flashcards, full-length practice exams generated fresh on every attempt, and a live Exam Readiness Score that tells you when you're actually ready to sit the real exam.

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How to use this exam

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Click an answer to lock in your choice and reveal the explanation.
Use Next and Previous to move between questions. Skipped questions count as wrong.
Finish to see your total score and a topic-by-topic breakdown.

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The exam

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Question 1 of 51 · 0 answered

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You just took one Series 63 practice exam. The CertFuel app generates a fresh full-length practice exam every time you sit one, sampled from a 2,100-question bank, scored by NASAA topic, and tracked over time so your Exam Readiness Score reflects where you actually are.

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