Series 63 flashcards
Series 63 · Build recall with a focused review session.
32 cards. Read the term and the definition here. The deck at the top of this page is optional.
- Broker-Dealer
- A person engaged in the business of effecting securities transactions for its own account or for the accounts of others; banks, issuers, and certain excluded persons are not broker-dealers.
- Agent
- An individual associated with a broker-dealer who represents it in effecting securities transactions and who must register in each state where business is transacted unless exempt.
- Investment Adviser
- A person who, for compensation, advises others about securities or issues reports about securities; banks and professionals whose advice is incidental are excluded.
- Investment Adviser Representative
- An individual associated with an investment adviser who makes recommendations, manages client accounts, or solicits clients, and who must register unless an exemption applies.
- Federal Covered Adviser
- An investment adviser registered with the SEC; it does not obtain state registration but files a notice, fee, and consent to service where required.
- Form U4
- The uniform application used to register agents and investment adviser representatives, disclosing employment history, outside activities, and disciplinary events.
- Consent to Service
- An irrevocable appointment of the state administrator as attorney to receive service of process, filed with registration applications.
- Coordination
- A state registration procedure for an offering also registered with the SEC; the state registration becomes effective when the federal registration becomes effective.
- Qualification
- A state registration procedure in which the administrator reviews the offering on its merits and declares the registration effective by order.
- Notice Filing
- A filing for federal covered securities that provides notice, fee, and consent to service but does not give the state authority to approve the offering.
- Exempt Security
- A security excluded from state registration, such as U.S. government, municipal, bank, nonprofit, insurance, or certain common carrier securities.
- Exempt Transaction
- A securities transaction excluded from registration, such as an isolated nonissuer trade, an unsolicited brokerage order, or a limited private offering.
- Limited Offering Exemption
- A private offering exemption permitting offers to no more than ten noninstitutional persons in twelve months without general advertising or unregistered agent compensation.
- Cease and Desist Order
- An administrative order directing a person to stop conduct that violates or would violate securities law, issued after notice and an opportunity for hearing.
- Summary Suspension
- An emergency administrative action suspending a registration when public interest and investor protection require immediate action, with a hearing to follow promptly.
- Rescission
- A remedy that cancels a securities sale and requires the seller to return the consideration plus interest, usually upon the purchaser tendering the security.
- Restitution
- An administrative or court order requiring a violator to repay money or property obtained from investors or customers.
- Civil Penalty
- A monetary fine imposed by the administrator or a court for a securities law violation, in addition to or instead of restitution.
- Statute of Limitations
- The deadline for a civil securities action: three years after the sale or two years after discovery of the violation, whichever occurs first.
- Retail Communication
- A written or electronic communication distributed to more than twenty-five retail investors within thirty days, requiring principal approval and supervision.
- Correspondence
- A written or electronic communication sent to twenty-five or fewer retail investors within thirty days, subject to supervisory review and recordkeeping.
- Testimonial
- A statement by a customer about an investment professional or firm; if used in advertising, it must be fair and disclose compensation or conflicts.
- Performance Advertising
- Marketing material showing investment returns; it must be net of fees, include risk disclosures, and avoid implying that past results will repeat.
- Guarantee Prohibition
- A rule barring agents from promising that an investment will not lose value or that a specific investment return is assured.
- Cold Calling
- Telephone solicitation of prospective customers; the caller must identify the firm and purpose and must comply with do-not-call requirements.
- Unauthorized Trading
- Entering a securities transaction for a customer without the customer's authorization or a valid written discretionary power.
- Churning
- Excessive trading in a customer account to generate commissions rather than to meet the customer's investment objectives.
- Selling Away
- An agent's private securities transaction outside the employing broker-dealer without the firm's knowledge and written approval.
- Commingling
- Mixing customer funds or securities with the firm's own assets, prohibited because it creates custody and misappropriation risk.
- Front Running
- Trading for one's own account ahead of a customer order to profit from the expected price impact of that order.
- Insider Trading
- Buying or selling securities on material nonpublic information obtained in breach of a duty, or communicating that information to others.
- Borrowing from Customer
- A transaction generally prohibited unless the customer is a financial institution or the firm approves it in writing under strict conditions.