Series 63
study guide
Every chapter of the course summarized, with each section linked to its lesson.
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This free Series 63 study guide summarizes all 4 chapters of Achievable's Series 63 course: what each covers, the points to remember, and its 48 sections in order. Read each chapter after you study it, or work through the whole guide before exam day.
Each section links to its full lesson in Achievable, with the review quizzes and full-length practice exams.
Chapter 1: Definitions
10 sections
- Person definitions: A person is any natural person (human being) or any legal entity, while minors, incapacitated, and deceased are non-persons.
- Exempt and excluded: An exemption means regulations do not apply because of ongoing legal exception, and an exclusion means regulations do not apply because the item or entity is not the subject of the law.
- Issuers and securities: Issuers raise capital by offering securities to investors, securities are the formal name for an investment, and the Howey test has four requirements: investment of money, common enterprise, expectation of profit, and third-party effort.
- Market transaction types: Issuer transactions occur in the primary market and give the issuer sales proceeds, while non-issuer transactions occur in the secondary market and give sales proceeds to any person other than the issuer.
- Broker-dealer roles: A broker-dealer effects securities transactions for the account of others or for his own account, and broker/agency capacity earns a commission while dealer/principal capacity earns markdowns and markups; an agent is a natural person representing broker-dealers and issuers.
- Advisers and investors: Investment advisers provide securities advice as a regular part of business for compensation, IARs represent a financial firm in offering securities advice, and retail investors are typically protected while institutional investors generally are not.
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Chapter 2: Registration
21 sections
- Broker-dealer forms: Form BD requires disclosure of the business’s basics, other jurisdictions, business structure, business dynamics, and business history, and consent to service of process is one-time only.
- Broker-dealer fees: Filing fees generally accompany each registration form, are never prorated, and are not required for successor firm filings.
- Broker-dealer timing: Registration lasts until the end of the calendar year, first registration is always "short," and renewal must occur before year-end to prevent lapse.
- Broker-dealer standards: Broker-dealers must maintain minimum net capital, NSMIA prioritizes federal securities laws over state laws, and SIPC insurance must be confirmed at account opening and annually.
- Broker-dealer obligations: Effective registration follows submission of Form BD disclosures, fees, consent to service of process, minimum net capital confirmation, and any required surety bonds, usually on the 30th day at noon.
- Broker-dealer records: Post-registration records must include accounts, correspondence, memoranda, books and records, and other required records, kept for 3 years generally or 6 years for blotters and ledgers.
- Agent and adviser registration: Form U4 and Form ADV require specified disclosures, filings, and fees, while effective registration is typically on the 30th day after filing and never means state "approval."
- Securities registration: Securities must be registered or exempt, with federal-covered securities, notice filing, coordination, qualification, exempt securities, and exempt transactions determined by the stated rules.
In this chapter
- Broker-dealers
- Agents
- Investment advisers
- Investment adviser representatives (IARs)
- Securities
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Chapter 3: Enforcement
4 sections
- Administrator powers: State administrators have registration oversight, authority to investigate, and ability to issue rules, orders, and notices.
- Registration oversight: Applicants with checkered pasts may be denied registration, and current registrations may be suspended or revoked if a law or rule is broken.
- Punitive actions: Punitive action must be in the public's interest and may follow specified application problems, recent violations, court injunctions, other regulatory action, or listed disqualifying conduct.
- Non-punitive and penalties: Withdrawal is voluntary, cancellation is proactive, criminal penalties require a willful violation with a 5-year statute of limitations, and civil liabilities may include restitution, rescission, or civil penalties.
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Chapter 4: Ethics
13 sections
- Broker-dealer pay: Broker-dealers are compensated via commissions for agency transactions and via markups or markdowns for principal transactions, where the broker-dealer is the contra party.
- Fee rules: Fees must be reasonable and fair, and excessive fees can be penalized, while unusual fees must be disclosed and accepted before the trade.
- Adviser compensation: Investment advisers may charge AUM fees, fixed fees, or hourly fees, and additional compensation like commissions, wrap fees, soft dollars, and performance fees is allowed only in specific cases.
- Required disclosures: Ongoing client disclosures include broker-dealer fee schedules, the adviser brochure package in Form ADV Part 2A, Part 2A Appendix 1, and Part 2B, plus conflict disclosures in the brochure.
- Client agreements: New accounts require CIP and suitability information, discretionary authority, margin authority, or advisory contracts only under their stated written terms, including delivery and approval requirements.
- Advertising standards: Communications must avoid misleading statements, false information, and unfair or unbalanced presentations, while testimonials, endorsements, third-party ratings, and social media posts follow specific disclosure and approval rules.
- Unethical conduct: Reg BI, market manipulation, fraudulent acts, vulnerable adult protections, and cybersecurity duties all prohibit deceptive conduct and require prompt reporting, safeguards, and responsible handling of client data.
In this chapter
- Compensation
- Communications
- Customer funds & securities
- Unethical & criminal actions
- Protecting vulnerable adults
- Cybersecurity
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Series 63 exam at a glance
- Questions
- 60 multiple-choice questions
- Time
- 1 hour 15 minutes
- Passing score
- 71.7% (43/60)
- Exam fee
- $147
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