T O P   S T O R I E S

NASAA announces April 1 changes to Series 63 exam for broker dealer reps; More questions will require more time at test centers; exam cost will increase $5.

(WASHINGTON) February 1, 2002 – The North American Securities Administrators Association (NASAA) today announced upgrades to the Series 63 exam, which individuals must pass before being licensed as a broker dealer representative by state securities regulators.

Effective April 1, the Series 63 exam will be expanded from 50 to 65 questions, five of which will not count toward the final score. The time provided for taking the test will also be increased from 60 to 75 minutes. The score required to pass the exam will remain at 70 percent. To address the increased time test takers will need to be at the testing centers, the cost of the Series 63 will increase from $65 to $70.

The updated exam will cover the same subject matter as before, but it will draw from a new and more extensive bank of questions. The questions, developed with input from industry and regulators, have been statistically validated for degree of difficulty and the scope of the materials covered.

“These updates to the Series 63 exam reflect NASAA’s ongoing commitment to ensuring that this important exam is current and comprehensive,” said Joe Borg, Alabama Securities Director and President of NASAA.

The Series 63 covers the principles of state securities regulation reflected in the Uniform Securities Act, with amendments adopted by NASAA. It is intended to provide a basis for state securities administrators to determine an applicant`s knowledge and understanding of state law and regulations. It is administered on NASAA’s behalf by the National Association of Securities Dealers (NASD) at the same computerized testing sites used for federally required exams such as the Series 7.

Two other NASAA tests – the Series 65 (Uniform Investment Adviser Law Examination) and the Series 66 (Uniform Combined State Law Examination) – are also administered for NASAA by NASD. They will continue to cost $110.

Attached is an outline showing the specifications of the updated Series 63 exam.

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Contact:
Ashley Baker
(202) 737-0900
ab@nasaa.org


Uniform Securities Agent State Law Examination
~ Series 63 ~
Updated Exam Specifications

CONTENT AREA # OF ITEMS
I. Registration of Persons 18 questions (30%)
A. Broker-dealers
1. Definitions
2. Initial, renewal, update, termination and when required
B. Agents
1. Definitions
2. Initial, renewal, update, termination and when required
C. Other Persons
1. Definitions
2. Initial, renewal, update, termination and when required
D. Ongoing requirements
1. Books and records
2. Financial reporting

II. Securities 15 questions (25%)
A. Definitions
1. Securities
2. Offer or sale
3. Other (e.g., non-issuer, guaranteed)
B. Registration
C. Exemptions
1. Securities
2. Transactions
D. Federal covered securities

III. Business practices (including fraudulent and dishonest practices) 21 questions (35%)
A. Communications with clients and prospects (e.g., disclosure, unlawful representations concerning registrations)
B. Trade practices (e.g., suitability, excessive trading, insider trading, selling away, discretion, conflict of interest)
C. Compensation (e.g., fees, commissions)
D. Other issues (e.g., compliance, handling of client funds or securities)

IV. Administrative provisions and other remedies Six questions (10%)
A. Operating procedures for the administrator (e.g., investigation, issuing subpoenas and orders, jurisdiction)
B. Administrative actions (e.g., denial, revocation, suspension) and basis for disciplinary action (including false and misleading filings)
C. Other penalties and liabilities (e.g., civil, criminal)
D. Other provisions (e.g., filing of sales and advertising literature)

(Five additional questions do not count towards score)