Series 63 Exam Quick Reference:

Examinee Qualification: Securities agent
Time Allowed for Exam: 1.25 hours (75 minutes)
Number of Questions: 60
Exam Format: Multiple choice
Score Required to Pass: 72%
Exam preparation time: Approximately 10 hours (1-2 weeks with an hour of prep time daily)
Existing License Required: No
Testing Locations: Prometric Testing Centers throughout the U.S., Canada, Mexico, and U.S. Territories
Covers Uniform Securities Act:

State Registration Laws and Procedure
Penalties and Suspension
Lawful Practices
Definition of Terms
Discretionary Rules

Series 63 Exam Overview

The Series 63 Exam was developed by the North American Securities Administrators Association (NASAA) and administered by the Financial Industry Regulatory Authority (FINRA). This exam tests knowledge of the Uniform Securities Act of 1956 and the Statements of Policy and Model Rules adopted by NASAA. The Uniform Securities Act prohibits fraudulent practices related to securities sales and solicitation and requires the registration of broker-dealers, investment advisers, investment adviser representatives, and securities representatives.

The Series 63 license by itself does not allow examinees to act as securities agents. It is always taken in conjunction with another securities agent license exam like the Series 7 (General Securities Representative), Series 6 (Investment Company Products/Variable Contracts Limited Representative), or other limited representative licenses.

After approval of enrollment, candidates have 120 days to take the exam. It the exam is not scheduled within 120 days, enrollees must enroll again and will again be subject to paying the fee.

Examinees who fail the exam have to wait 30 days to take it again. Examinees who fail the exam three or more times in a row must wait 180 days to take the exam again.

Series 63 Exam Content

Sixty percent (36 questions) of the exam covers State Securities Acts and related rules and regulations:

Regulation of Investment Advisers (IAs), both state-registered advisors and those registered with the Securities and Exchange Commission (SEC)

Investment advisers are firms that offer advice about securities in exchange for a fee. (3 Questions)

Definitions of professional titles, duties, and roles
Registration process
Post-registration requirements
Termination protocol

Regulation of Investment Adviser Representatives (IARs)

Investment Adviser Representatives are the individuals associated with an investment adviser firm. (3 Questions)

Definitions of professional titles, duties, and roles
Registration process

Regulation of broker-dealers and of the agents of broker-dealer

The SEC defines a broker as any person in the business of making securities transactions for accounts belonging to other people, and dealers as anyone in the business of buying and selling securities for their own account. (12 Questions on BD/6 Questions on BD Agents)

Definitions of professional titles, duties, and roles
Registration process
Post-registration requirements
Termination protocol

Regulation of securities and issuers (6 Questions)

Issuers are defined as governments, corporations, or investment trusts that register and sell securities to finance their own business operations.

Definitions of professional titles, duties, and roles
Registration process
Post-registration requirements
Exemptions
State authority over federally covered securities

Remedies and administrative provisions (6 Questions)

Administrator’s authority
Administrative actions
Liabilities and penalties
Other provisions such as advertising materials and filing sales

Forty percent (24 Questions) of the exam covers ethics and fiduciary obligations. Fiduciary obligations refer to the expectations of trust between securities agents and their clients with regard to making investment decisions that are always in the clients’ best interest.

Communications with clients and prospects (8 Questions)

Disclosures
Unlawfully representing registrations
Guarantees of performance
Contractual agreements with clients

Compensation of securities agents and firms (4 Questions)

Fees
Commissions
Fees based on meeting specific performance metrics
Soft dollars (payments that mutual funds or other money managers make to their service providers)
Disclosure of Compensation

Client funds and securities (8 Questions)

Custody of client financial assets
Discretion over client accounts
Authorization to trade
Sensible investing standards
Suitability and reasonable basis for making a recommendation based on age, risk tolerance, and financial standing

Conflicts of interest and other issues concerning fiduciary responsibility (4 Questions)

Client confidentiality
Excessive trading
Loans to and from clients
Insider trading
Selling away (the offering of securities not available from the representative's firm)
Market manipulation

States That Require The Series 63 Exam for Securities Agent Licensing

Alabama
Alaska
Arizona
Arkansas
California
Connecticut
Delaware
Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Maine
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
New Hampshire
New Mexico
New York
North Carolina
North Dakota
Oklahoma
Oregon
Pennsylvania
Rhode Island
South Carolina
South Dakota
Tennessee
Texas
Utah
Virgin Islands
Virginia
Washington
West Virginia
Wisconsin
Wyoming

States That Do Not Require The Series 63 Exam for Securities Agent Registration

Colorado
District of Columbia
Florida
Louisiana
Maryland
New Jersey
Ohio
Puerto Rico
Vermont

Applying for the Series 63 Exam

Employing firms that are members of the Financial Industry Regulatory Authority (FINRA) will submit Form U4 and pay the examination fee on behalf of applicants applying to take the Series 63 exam as employees or associates of these FINRA-member firms. Form U4 and exam fees will be submitted through FINRA’s Central Registration Depository.

Applicants applying to take the Series 63 exam as employees or associates of non-FINRA member firms must submit Form U10 and pay the fee themselves. Form U10 and exam fees will be submitted through FINRA’s Central Registration Depository (CRD) if the exam is being taken to satisfy requirements set forth by a Self Regulatory Organization with access to the CRD. Applicants who are taking the exam electively in preparation for further licensing will submit form U10 and exam fees directly through their state’s Securities Commission.