Series 63 practice questioneasyCompensation Disclosure Basics
Under the Uniform Securities Act, when must an agent disclose to a client any compensation received from the sale of a security?
- ABefore or at the time of the recommendation or transaction✓ Correct answer
- BOnly if the client asks about compensation
- CAfter the transaction is completed
- DNever; compensation disclosure is not required
Explanation
Why A — Before or at the time of the recommendation or transaction
Agents must disclose all material facts, including compensation, prior to or at the time of a recommendation or transaction (USA Section 402). Disclosure afterward or only upon request is insufficient, and non-disclosure is a violation.
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