Series 63 practice questioneasyBroker-Dealer Registration — Requirements
In a state-law practice set, a candidate reviews the following scenario. Read it as a Uniform Securities Act issue rather than a federal-law issue. Under the Uniform Securities Act, which of the following BEST defines a broker-dealer?
- AAny person who effects transactions in securities for the account of others or for its own account✓ Correct answer
- BAny person who provides investment advice for compensation
- CAn individual who represents a broker-dealer in effecting securities transactions
- DA bank or savings institution engaged in trust activities
Explanation
Why A — Any person who effects transactions in securities for the account of others or for its own account
Under USA Section 401(c), a broker-dealer is any person engaged in the business of effecting transactions in securities for the account of others or for its own account. Investment advisers and agents are defined separately, and banks are generally excluded from the broker-dealer definition. The exam trick is the framing, not the underlying Uniform Securities Act rule.
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