Lucky the Banker mascotLTB
Series 63: Regulation of Investment Advisers
Series 63 practice questioneasySurprise examination requirements

Which of the following would MOST likely trigger a surprise examination requirement for an investment adviser under state rules?

  1. AThe adviser directs client trades but does not hold client funds
  2. BThe adviser has custody of client securities in a pooled account✓ Correct answer
  3. CThe adviser receives discretionary authority limited to rebalancing portfolios
  4. DThe adviser only collects prepaid fees, but less than six months in advance
Explanation

Why BThe adviser has custody of client securities in a pooled account

Having custody of client securities—even in a pooled account—typically triggers the requirement for a surprise examination by an independent public accountant. Discretion and trade direction alone do not. (USA §411(b), NASAA Model Rule IA Custody).

Turn it into reps

Reading one answer is not the same as being ready

Lucky the Banker is a free practice app with 1,051+ Series 63 questions, weak-area tracking, and timed mock exams. No credit card, no paywall.

Spot an error in this question or explanation? Tell us — we fix these fast.

Related Regulation of Investment Advisers questions