Category: NASAA

Upcoming Series 63, 65 and 66 Changes

The North American Securities Administrators Association (NASAA) has announced that it will implement updates to the Series 63, Series 65 and Series 66 examinations on July 1, 2016. What has changed? Continue reading

The North American Securities Administrators Association (NASAA) has announced that it will implement updates to the Series 63, Series 65 and Series 66 examinations on July 1, 2016.

The changes are aimed at better aligning the skills and knowledge required by professionals in the securities industry.

The new exam outlines are similar to the current exam outlines, but some significant changes have been made.

What has changed?

Series 63                                                         

  1. The weighting of the exam sections has been modified to put more emphasis on the registration of broker-dealers over investment advisers
  2. Several new topics have been added which reflect an emphasis on communications with customers and cyber-security. Specifically, the following topics have been added or amended:
  • Exceptions for foreign B-Ds
  • B-D supervision of agents
  • Prospectus delivery requirements
  • Types of customer accounts
  • B-D and agent commissions
  • Cyber-security and data protection
  • Outside securities accounts
  • Due diligence for B-Ds
  • Regulation A amendment
  • Regulation D amendment

Series 65                                                         

  1. The weighting of the exam sections has been modified to put slightly more emphasis on the characteristics of investment vehicles and slightly less emphasis on rules and regulations.
  2. Several new topics have been added which expand the types of investment products and add regulations on electronic communications, cyber-security, pay-to-play and anti-money laundering. Specifically, the following topics have been added or amended:
  • Valuation of equity securities
  • Real estate investments
  • Viatical and life settlements
  • Structured products
  • Commodities and precious metals
  • QDROs
  • High frequency trading
  • Regulation A amendment
  • Regulation D amendment
  • Electronic communications and social media
  • B-D and agent commissions
  • Cyber-security and data protection
  • Pay-to-play rule
  • Anti-money laundering
  • Business continuity plans

Series 66                                                         

  1. The passing score has been lowered from 75% to 73%.
  2. The weighting of the exams sections has been modified to put slightly more emphasis on the characteristics of investment vehicles and slightly less emphasis on rules and regulations
  3. Several new topics have been added which expand the types of investment products and add regulations on electronic communications, cyber-security, pay-to-play and anti-money laundering. Specifically, the following topics have been added or amended:
  • Valuation of equity securities
  • Technical analysis
  • Real estate investments
  • Viatical and life settlements
  • Structured products
  • Commodities and precious metals
  • QDROs
  • High frequency trading
  • Regulation A amendment
  • Regulation D amendment
  • Electronic communications and social media
  • B-D and agent commissions
  • Cyber-security and data protection
  • Pay-to-play rule
  • Anti-money laundering

How will this affect my Solomon Exam Prep products?

Solomon Exam Prep will be updating all products offered for the NASAA exams. For those students that currently have materials and are testing after July 1, 2016, we have added an addendum to their Resources folder (located on their student account), that includes all rule changes and updates.

Our Online Exam Simulator has already been adjusted to reflect the new changes, so students will see an option to take full exams structured prior to July 1 or after July 1 – this will allow for any and all students to utilize our products regardless of their anticipated exam date. We are always adding new questions to our database and that will be reflected in the Online Exam Simulator.

In the coming weeks we will also be releasing a new/ updated digital Study Guide that will reflect the upcoming changes. Any current students will have the option of having their digital Study Guide changed to the new edition at that time, or they can continue to study with our current edition and the supplied addendum.

If you have any questions about the changes or our materials, please do not hesitate to call our office at 503.601.0212 or email info@solomonexamprep.com.

Fiduciary Standard Coming for Broker-Dealers

The Securities and Exchange Commission announced last week that next April it plans to introduce a fiduciary standard for broker-dealers. Since last month when the Department of Labor issued its fiduciary rule for tax-advantaged retirement accounts, the securities industry has been waiting to see if the SEC would join the Department of Labor in a push to raise the legal and ethical standards for broker-dealers and agents. Continue reading

Decorative Scales Of Justice In The LibraryThe Securities and Exchange Commission announced last week that next April it plans to introduce a fiduciary standard for broker-dealers. Since last month when the Department of Labor issued its fiduciary rule for tax-advantaged retirement accounts, the securities industry has been waiting to see if the SEC would join the Department of Labor in a push to raise the legal and ethical standards for broker-dealers and agents.

Currently, broker-dealers and agents are held to the less stringent suitability ethical standard while investment advisors and investment advisor representatives are held to the higher fiduciary standard. The higher standard requires disclosure of all conflicts of interest and ensures the client’s interests come first. While SEC Chair Mary Jo White has said she supports a uniform fiduciary rule, Republicans in Congress have strongly opposed the effort by the Labor Department to expand the fiduciary standard to retirement accounts.  However, many in the securities industry hope that the SEC’s efforts will harmonize with the Department of Labor’s efforts, making compliance more uniform and less complicated.

Changes Coming Soon to Series 63, Series 65 and Series 66 Exams

The North American Securities Administrators Association (NASAA) has announced that it will implement updates to the Series 63, 65 and 66 examinations on July 1, 2016. Continue reading

Newspaper Change Is ComingThe North American Securities Administrators Association (NASAA) has announced that it will implement updates to the Series 63, 65 and 66 examinations on July 1, 2016.

The changes are a result of a review of the exams by NASAA and Prometric and are being put into effect to update and align skills and knowledge required by those in the securities industry.

The weighting of the exams will be modified, as will the number of questions for each topic. The passing score for the Series 63 and 65 will not change, but the Series 66 passing score will be lowered from 75% to 73%.  “Everyone who has to take the Series 66 exam should be happy to hear that,” says Solomon Exam Prep President, Jeremy Solomon, “as well as anyone related to someone who has to take the Series 66 exam.”

New topics will be added to each exam, for example including more on advertising and correspondence. The Series 65 and 66 will include new areas of focus on custody obligations and anti-money laundering. Other topics on the exams will be de-emphasized, while others will be expanded, combined or renamed for the sake of clarity.

Solomon Exam Prep will be making updates and changes to its industry-leading Series 63, Series 65 and Series 66 exam study program to prepare students for the revised exams. Students will receive additional resources with updates as they are made available. Upon publication of the 2nd edition, students may request a free upgrade of their digital guide. Hard copy guides will not be replaced.

For more information, see: http://www.nasaa.org/industry-resources/exams/exam-change-announcement/

Personal Finances and Your Registration

Could a poor credit rating or a personal bankruptcy prevent you from getting licensed to work in the securities industry? Here are some things to know. Continue reading

Updated Jun 30, 2022

Are you looking to start a career in the financial or securities industries? Passing securities exams like the Securities Industry Essentials (SIE), the Series 6, or Series 7 isn’t the only criteria for getting registered to work in the industry. Your personal financial history may also factor into whether you can become licensed and land a job.

So could a poor credit rating or a personal bankruptcy negatively impact your ability to get licensed to work in the securities industry? Here’s some information about how your personal financial situation may affect your registration process.

First, an important caveat: this is not legal advice and, as an education company, Solomon Exam Prep provides this information for educational purposes only. Please consult with a compliance professional to identify and address any issues regarding your situation or your state’s regulations. Always check with your compliance department regarding compliance issues.

1. Be sure to disclose relevant information on Form U4.

Form U4 is the registration form for broker-dealer agents and investment adviser representatives. It asks several questions about your history, including some on your finances. Such questions include whether you or a company you controlled have been subject to a bankruptcy within the past ten years. Answer these questions completely and honestly! Failing to disclose this information could jeopardize your ability to work in the securities industry–it could result in a statutory disqualification.

2. You may be denied registration based on insolvency.

If the state securities administrator discovers that you are insolvent (meaning you can’t pay your debts), they may deny your registration if they feel that it’s in the public’s interest.

3. You may be denied registration based on your financial history.

FINRA may deny your registration based on your answers to the questions on Form U4. This means that FINRA could deny your registration if:

    • you or a company you controlled have been subject to a bankruptcy within the past ten years
    • a bonding company denied, paid out on, or revoked a bond for you
    • you have unpaid legal judgments or liens

4. You may be denied registration for having a poor credit history.

Having a poor credit history could result in your registration being denied. Regulators may require applicants to submit balance sheets. The information on such sheets will be factored into the overall decision of whether to approve or deny your application.

5. Your application for registration will not be automatically accepted if you have financial issues that are required to be reported on Form U4.

If you report financial problems on your application, it will not be automatically accepted. Instead, it will be transferred to a manual review process.

6. Once you’re registered, you may lose your registration due to poor credit, bankruptcy, or insolvency.

Even if you’re already registered, you’re still required to report certain events by updating Form U4. Your registration is still subject to review when you do so.

7. You may be able to get registered even if you don’t have a spotless financial history.

Regulators are looking out for your customers. They want to collect all relevant information so they can stop problems before they start. They will only deny your registration if they feel it’s in the public’s interest.

If a checkered financial history fits with other red flags, such as a criminal record or a history of regulatory violations, then a denial would be more likely. However, an isolated financial incident would be less likely to cause regulators to deny a registration. Regulators look at each case individually.

Final Thoughts

Note that regulations vary by state, and that in some states regulators will not look at your credit rating when evaluating your application. Certain regulators may also allow you to send your information before you apply, so you can see whether they would accept your application.

For more information, contact your state securities administrator. Find contact information on NASAA’s website.

Reminder: this is not legal advice and is provided for educational purposes only. Please consult with a compliance professional to identify and address any issues regarding your situation or your state’s regulations. Always check with your compliance department regarding compliance issues.

Study Question of the Week: August 20, 2013 Edition

This week’s study question from the Solomon Online Exam Simulator question database is now available. Relevant to the Series 65 and Series 66. –ANSWER POSTED– Continue reading

This week’s study question from the Solomon Online Exam Simulator question database is now available.

Question (Relevant to the Series 65 and Series 66): 

Over a five year period, the annual returns on a particular investment were 15%, -10%, -5%, 10%, 10%. What is the most appropriate measure of central tendency for this investment?

Answers:

A. arithmetic mean

B. geometric mean

C. median

D. mode

Correct Answer: B. geometric mean

Rationale: Central tendency is a single value that summarizes a set of scores. The geometric mean is the most accurate measure of central tendency for a set of returns because the returns for each year on an investment are not independent of one another. Each year your total capital is shrinking or growing depending on the performance of the previous year, so that a 10% increase one year may be different than a 10% increase in another year. The arithmetic average does not account for this fact. The geometric mean does account for this, and thus gives the investor a truer representation of the central tendency of their returns.

Weekly study questions are from Solomon’s industry-leading Online Exam Simulator.

Study Question of the Week: August 13, 2013 Edition

This week’s study question from the Solomon Online Exam Simulator question database is now available. Relevant to the Series 6, Series 7, Series 62, Series 65, and Series 66. –ANSWER POSTED– Continue reading

This week’s study question from the Solomon Online Exam Simulator question database is now available.

Question (Relevant to the Series 6, Series 7, Series 62, Series 65, and Series 66): 

Your father bought 200 shares of stock in Acme Holdings in 1982 at $20 per share. On the day he died and left the shares to you, the stock was worth $45 per share. You sold all of the shares one month later for $48 per share. What is your tax burden on this sale?

Answers:

A. You pay long-term capital gains tax on $5600.

B. You pay long-term capital gains tax on $5000 and short-term capital gains on $600.

C. You pay long-term capital gains tax on $600.

D. You pay short-term capital gains tax on $5600.

Correct Answer: C. You pay long-term capital gains tax on $600.

Rationale: Your basis in these shares is their value on the day your father died (200 X $45 = $9000). Your proceeds from the sale are $9600. Your capital gain is $600, and the IRS treats this as a long-term capital gain.

Weekly study questions are from Solomon’s industry-leading Online Exam Simulator.

Study Question of the Week: July 23, 2013 Edition

This week’s study question from the Solomon Online Exam Simulator question database is now available. Relevant to the Series 6, Series 7, Series 24, Series 26, Series 62, Series 65, and Series 66. –ANSWER POSTED– Continue reading

This week’s study question from the Solomon Online Exam Simulator question database is now available.

Question (Relevant to the Series 6, Series 7, Series 24, Series 26, Series 62, Series 65, and Series 66): 

Roth IRAs are more liquid than traditional IRAs in what way?

Answers:

A. they offer tax-free distribution

B. they allow for the withdrawal of all principal contributions at any time without tax or penalty

C. there are a larger number of exceptions available to the early withdrawal penalty

D. there are no mandatory minimum distributions required

Correct Answer: B. they allow for the withdrawal of all principal contributions at any time without tax or penalty

Rationale: Although Roth IRAs do offer tax-free distributions and have no mandatory minimum distributions, their advantage in liquidity lies in the ability of the account owner to withdraw all principal contributions at any time, including before age 59 1/2.

Weekly study questions are from Solomon’s industry-leading Online Exam Simulator.

Study Question of the Week: June 11, 2013 Edition

This week’s study question from the Solomon Online Exam Simulator question database is now available. Relevant to the Series 63, Series 65, and Series 66. –ANSWER POSTED– Continue reading

This week’s study question from the Solomon Online Exam Simulator question database is now available.

Question (Relevant to the Series 63, Series 65, and Series 66): 

Which of the following are likely to be exempt from state registration as an investment adviser under the Uniform Securities Act?

I. A certified public accountant (CPA) who reviews client asset allocations upon request

II. An individual representative of a firm that offers investment advice and management for a fee

III. A federally covered investment adviser

Answers: 

A. I and II

B. I and III

C. I, II, and III

D. II and III

Correct Answer: C.

Rationale: Federal law and the Uniform Securities Act define investment advisers as people who provide investment advice in exchange for compensation of some kind, but there are several types of exemptions, including: an investment adviser representative (IAR) working for an investment adviser (so II is exempt); a bank, savings institution, or trust company; a lawyer, accountant, teacher, or engineer whose provision of investment advice is incidental to their profession (so the CPA is exempt); a broker-dealer or its agents if the provision of investment advice is incidental to its business of buying and selling securities and not directly compensated; a publisher of a bona fide publication of general and regular circulation; a federally covered investment adviser (III is exempt). If the RIA is federally covered (registered with the SEC as an RIA), then it does not have to register at the state level. However, any of its IARs doing business in the state are required to register.

Weekly study questions are from Solomon’s industry-leading Online Exam Simulator.

Study Question of the Week: May 15, 2013 Edition

This week’s study question from the Solomon Online Exam Simulator question database is now available. Relevant to the Series 7, Series 24, Series 62, Series 79, Series 82. –ANSWER POSTED– Continue reading

This week’s study question from the Solomon Online Exam Simulator question database is now available.

Question (Relevant to the Series 7, Series 24, Series 62, Series 79, and Series 82): 

Placement agents for private placements almost always engage in a __________ commitment with the issuer.

Answers:

A. firm

B. best efforts

C. shelf

D. primary

Correct Answer: B

Rationale: Placement agents for private placements almost always engage in a best efforts commitment with the issuer.

 

Weekly study questions are from Solomon’s industry-leading Online Exam Simulator.

Study Question of the Week: May 9, 2013 Edition

This week’s study question from the Solomon Online Exam Simulator question database is now available. Relevant to the Series 7, Series 62, Series 65, and Series 66. –ANSWER POSTED– Continue reading

This week’s study question from the Solomon Online Exam Simulator question database is now available.

Question (Relevant to the Series 7, Series 62, Series 65, and Series 66): 

An investor wishing to hedge a short position AND put a little extra cash in his pocket at the same time will…

Answers:

A. Buy calls on the stock

B. Buy puts on the stock

C. Sell calls on the stock

D. Sell puts on the stock

Correct Answer: D. Sell puts on the stock

Rationale: Short sellers are bears; thus, they need to take a bullish position to hedge a short one. This can be done by buying calls or selling puts. Buying calls, however, takes money OUT of your pocket, while selling puts puts money IN your pocket.

Weekly study questions are from Solomon’s industry-leading Online Exam Simulator.