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Series 63: Regulation of Securities & Issuers
Series 63 practice questionmediumUnsolicited order exemption – suitability obligations

In an unsolicited order for a highly speculative unregistered security, what is the agent's obligation regarding suitability and disclosure under the USA?

  1. AThe agent must ensure suitability regardless of order type.
  2. BThe agent need not consider suitability but must disclose all risks.
  3. CThe agent should refuse the order if it's unsuitable, even if unsolicited.
  4. DThe agent must execute the order and maintain proper records, but suitability applies only to solicited transactions.✓ Correct answer
Explanation

Why DThe agent must execute the order and maintain proper records, but suitability applies only to solicited transactions.

Suitability applies to recommendations. For unsolicited orders, the agent executes the order, keeps records, and is not obligated to refuse on suitability grounds (USA 402(b)(3)).

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