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FINRA Series 63 Study Guide

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Section 1 Determine when a person is a broker-dealer Preview

Preview: 1. Regulation of Broker-Dealers (12%)

Preview includes
  • 2 of 2 lesson topics
  • 1 overview segment
  • 3 core concepts
  • 2 exam tips

Lesson Topics

  • Broker-Dealer Definition
  • Exclusions from the Definition

Overview

This objective focuses on determining when an entity meets the definition of a broker-dealer under the Uniform Securities Act. Key considerations include the nature of the business and the presence of exclusions

Core Concepts

  • Broker-Dealer Definition: A person engaged in effecting securities transactions for others or for its own account
  • Exclusions: Banks, savings institutions, trust companies, and the no-place-of-business exclusion
  • No-Place-of-Business Exclusion: Transacting only with specified institutions or existing customers temporarily present in the state

Exam Tips

  • Carefully parse the definition of a broker-dealer
  • Pay close attention to the wording of the exclusion criteria
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Section 2 Apply in-state broker-dealer registration requirements Pro
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Section 3 Evaluate a broker-dealer employing an agent Pro
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Section 4 Identify required broker-dealer application disclosures Pro
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Section 6 Determine when registration becomes effective Pro
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Section 7 Analyze automatic registration of firm principals Pro
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Section 8 Handle a broker-dealer succession Pro
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Section 9 Apply state financial requirements to a broker-dealer Pro
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Section 10 Evaluate a required surety bond Pro
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Section 11 Apply broker-dealer recordkeeping and reporting duties Pro
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Section 12 Correct materially inaccurate registration information Pro
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Section 13 Determine whether an individual is an agent Pro
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Section 14 Apply issuer-agent exclusions Pro
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Section 15 Evaluate an unaffiliated agent registration Pro
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Section 16 Report a change in agent affiliation Pro
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Section 17 Evaluate an agent application disclosure Pro
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Section 18 Distinguish firm title from agent activity Pro
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Section 19 Apply annual registration expiration Pro
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Section 20 Analyze agent disciplinary grounds Pro
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Section 21 Open an account at another financial institution Pro
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Section 22 Provide duplicate outside-account records Pro
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Section 23 Evaluate transaction-based payments to a finder Pro
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Section 24 Share agent compensation lawfully Pro
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Section 25 Handle a securities transaction away from the firm Pro
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Section 26 Apply commercial-honor standards Pro
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Section 27 Identify excessive trading Pro
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Section 28 Apply customer-specific recommendation analysis Pro
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Section 29 Apply Regulation Best Interest Pro
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Section 30 Use adviser or advisor titles accurately Pro
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Section 31 Prevent unauthorized trading Pro
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Section 32 Distinguish full discretion from time-and-price discretion Pro
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Section 33 Document a margin relationship Pro
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Section 34 Safeguard free customer securities Pro
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Section 35 Evaluate hypothecation of customer securities Pro
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Section 36 Evaluate prices and commissions Pro
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Section 37 Deliver offering disclosure Pro
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Section 38 Evaluate miscellaneous service fees Pro
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Section 39 Make a bona fide stated-price offer Pro
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Section 40 Use at-the-market language accurately Pro
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Section 41 Identify matched-order manipulation Pro
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Section 42 Identify a manipulative transaction series Pro
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Section 43 Reject a guarantee against loss Pro
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Section 44 Evaluate deceptive sales presentations Pro
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Section 45 Disclose broker-dealer issuer affiliation Pro
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Section 46 Complete a bona fide public offering Pro
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Section 47 Respond to customer information requests and complaints Pro
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Section 48 Satisfy final awards and judgments Pro
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Section 49 Handle customer lending or borrowing Pro
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Section 50 Share in customer profits or losses Pro
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Section 51 Classify broad retail distribution Pro
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Section 52 Classify limited retail distribution Pro
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Section 53 Classify institutional-only material Pro
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Section 54 Apply fair-and-balanced communication standards Pro
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Section 55 Maintain customer account information Pro
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Section 56 Seek a trusted contact Pro
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Section 57 Use a trusted contact appropriately Pro
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Section 58 Collect identifying information at account opening Pro
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Section 59 Verify customer identity timely Pro
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Section 60 Provide CIP notice Pro
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Section 61 Protect SAR confidentiality Pro
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Section 62 Calculate initial margin Pro
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Section 63 Calculate long-account equity Pro
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Section 64 Apply long-equity maintenance margin Pro
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Section 65 Apply pattern-day-trader equity Pro
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Section 66 Interpret SMA Pro
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Section 67 Distinguish call and put rights Pro
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Section 68 Separate intrinsic value from time value Pro
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Section 69 Recognize uncovered-call risk Pro
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Section 70 Respond to an administrator advertising-filing rule Pro
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Section 71 Apply the securities-registration requirement Pro
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Section 72 Choose registration by filing Pro
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Section 73 Choose registration by coordination Pro
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Section 74 Choose registration by qualification Pro
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Section 75 Reject claims of administrator approval Pro
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Section 76 Correct a misleading securities filing Pro
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Section 77 Handle a federal covered security notice filing Pro
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Section 78 Distinguish exempt securities from exempt transactions Pro
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Section 79 Apply the exemption burden of proof Pro
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Section 80 Determine whether a firm is an investment adviser Pro
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Section 81 Distinguish state registration from federal covered notice filing Pro
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Section 82 Review an advisory contract Pro
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Section 83 Handle adviser custody Pro
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Section 84 Disclose an advisory conflict before advice Pro
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Section 85 Determine whether an individual is an IAR Pro
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Section 86 Apply IAR place-of-business registration Pro
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Section 87 Apply the de minimis adviser and IAR rule Pro
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Section 88 Evaluate an unaffiliated IAR registration Pro
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Section 89 Report an IAR employment change Pro
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Section 90 Apply the Act antifraud provision Pro
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Section 91 Apply administrative discipline requirements Pro
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Section 92 Use administrator investigative authority Pro
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Section 93 Enforce an administrator subpoena Pro
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Section 94 Issue a cease-and-desist order Pro
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Section 95 Seek judicial enforcement remedies Pro
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Section 96 Apply criminal-liability standards Pro
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Section 97 Calculate a buyer civil remedy Pro
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Section 98 Apply controlling-person civil liability Pro
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Section 99 Apply the civil limitations period and rescission offer Pro
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Section 100 Distinguish SIPC protection from investment loss coverage Pro
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