Series 63 practice questionmediumDefinition of agent
A junior employee at XYZ Broker-Dealer in State M is paid a bonus for each client referral, but does not discuss securities. Under the USA, is this individual considered an agent?
- ANo, unless the individual is involved in actual securities transactions.✓ Correct answer
- BYes, because bonus compensation makes them an agent.
- CYes, because referrals are considered effecting transactions.
- DNo, provided the employee is not registered as an agent.
Explanation
Why A — No, unless the individual is involved in actual securities transactions.
Only those who effect or attempt to effect securities transactions for a broker-dealer are agents (USA Sec. 401(b)). Mere referrals, without involvement in transactions, do not make someone an agent.
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