Free Series 63 Practice Exam

What’s on the Series 63

• Regulations of Investment Advisers, Including State-Registered and Federal Covered Advisers5%

  • Definitions of Investment Advisers

    Covers what legally makes a person or firm an 'investment adviser' under state and federal definitions.

  • Activities requiring registration and exclusions from registration

    Covers which advisory activities trigger state or federal registration duties, and which professionals or activities are excluded.

• Regulations of Investment Adviser Representatives5%

  • Definition of an Investment Adviser Representative

    Covers who qualifies as an IAR under the Uniform Securities Act.

  • Activities requiring registration and exclusions from registration

    Covers which functions performed by an individual require IAR registration, and carve-outs from that requirement.

• Regulations of Broker-Dealers12%

  • Definition of a Broker-Dealer

    Covers how a firm is classified as a broker-dealer versus other market participants.

  • Registration and post-registration requirements

    Covers the process and ongoing obligations of state broker-dealer registration, plus which firms or activities are exempt.

  • Broker-Dealer Agent supervision

    Covers a firm's duty to supervise its registered agents' conduct and sales activity.

• Regulations of Agents of Broker-Dealers13%

  • Definition of an Agent of a Broker-Dealer

    Covers the legal definition of an 'agent' who sells securities on behalf of a broker-dealer or issuer.

  • Registration and post-registration requirements

    Covers agent registration steps, activities that trigger or are excluded from registration, and required uniform-form updates (e.g., Form U4) as an agent's circumstances change.

• Regulations of Securities and Issuers9%

  • Definition of securities and issuers

    Covers what counts as a 'security' (including the Howey test) and who is an issuer.

  • State registration and post-registration requirements

    Covers the process for registering securities offerings at the state level.

  • Exemptions from registration

    Covers which securities or transactions are exempt from state registration requirements.

  • State enforcement and antifraud authority

    Covers state regulators' power to police fraudulent securities offerings.

• Remedies and Administrative Provisions11%

  • Authority of state securities Administrator

    Covers the powers granted to a state's chief securities regulator, including investigation and rulemaking authority.

  • Administrative actions

    Covers regulatory remedies such as denial, suspension, or revocation of registration.

  • Other penalties and liabilities

    Covers civil and criminal liability that can result from securities law violations, including private rights of action.

• Communication with Customers and Prospects20%

  • Required product disclosures

    Covers information that must be disclosed to customers about a product before or at the time of sale.

  • Unlawful representations concerning broker-dealer agent registration

    Covers the rule that agent registration cannot be implied as a regulatory endorsement of the agent's competence.

  • Performance guarantees prohibition

    Covers the ban on promising or guaranteeing investment returns to customers.

  • Customer agreements (new account, margin, options)

    Covers required documentation and disclosures when opening standard, margin, or options-trading accounts.

  • Correspondence and advertising (social media, email/digital messaging, website/internet communications)

    Covers recordkeeping and content rules for customer communications across traditional and digital/social channels.

• Ethical Practices and Obligations25%

  • Compensation (fees, commissions, markups, disclosure of compensation)

    Covers permissible ways agents and firms are paid and the duty to disclose compensation arrangements to clients.

  • Customer funds and securities (custody, discretion, trading authorization, standard of care)

    Covers rules on holding client assets, exercising discretionary authority, and the fiduciary/suitability standards owed to customers.

  • Conflicts of interest, criminal activities, and other ethics issues

    Covers prohibited conduct including excessive trading (churning), improper loans with customers, sharing in account profits/losses, insider trading, selling away, market manipulation, undisclosed outside accounts, financial exploitation of vulnerable adults, and other dishonest practices.