NASAA Series 65 Course Notes

This is the broadest Series 65 section and mixes regulation, products, calculations, conduct, account rules, and registrations. Learn it as clusters instead of isolated facts. Communications are classified by audience and must be fair and balanced. Product questions hinge on structural distinctions, formulas, tax treatment, liquidity, and risk. Registration questions turn on definitions, activity, compensation, association, filing path, and timing. Conduct questions favor disclosure, written authorization, accurate records, customer protection, and antifraud. Options, bonds, funds, annuities, REITs, DPPs, municipal securities, margin, and portfolio risk all appear as short scenario/calculation items.

• Confusing retail communication with correspondence at the 25-investor threshold.

• Cluster the domain: communications, products, calculations, registration, conduct, customer protection.

Client strategy questions start with the customer profile: objective, time horizon, liquidity need, risk tolerance, finances, and costs. Orders then reflect execution priorities: FOK and IOC emphasize immediacy; stop orders prioritize execution after the trigger; stop-limit orders prioritize price control but may not execute. Covered securities settle T+1. Discretion requires documented authority. Recommendations must be customer-specific, not merely product-valid. Repeated or patterned conduct can become manipulation or excessive trading. Customer securities, trading authority, short-sale borrow requirements, complaints, and service fees are all handled through documented, customer-protective procedures.

• Assuming long horizon automatically means high risk tolerance.

• Start every recommendation with the client profile.

This section is procedural and rule-driven. Margin relationships require prompt written documentation; oral discussions do not substitute for the agreement. Administrative discipline requires both a public-interest finding and a statutory ground, and existing registration does not shield later misconduct. Final awards and judgments must be paid unless the customer and firm have a documented alternative arrangement; unilateral delay is not an agreement.

• Confusing margin documentation with the margin requirement itself.

• When the fact pattern stresses documentation, look for writing and timing.

This section tests regulatory distinctions more than product math. 'At-the-market' language requires a genuinely independent market; a broker-dealer cannot create or control the market and then call its own inventory price the market. A later amendment does not erase a prior misleading filing. Full discretion requires prior written authority; time-and-price discretion applies only when the customer has already specified the security and amount. Federal covered securities are subject to limited state notice-filing authority rather than state merit registration. Controlling persons and material-aid providers can face joint and several liability, subject to the knowledge/reasonable-care defense described in the source.

• Equating market existence with market independence.

• Ask who created or controls the market.