Learn about the Solomon Remediation Report, a new analytical feature designed to help students pass their securities licensing exams the first time. Continue reading
Solomon Exam Prep is delighted to announce an advanced analytical feature called a Remediation Report. The Solomon system analyzes a student’s five most recent practice exams and determines whether a student is ready to take his or her exam. If Solomon AI determines that a student is not ready to sit for their exam, then it creates an individual report with personalized guidance on how to remediate and prepare to pass. This custom Remediation Report is sent to the Solomon student’s email inbox.
The Solomon Remediation Report is connected to the Solomon Pass Probability tool, the industry-leading measure of a security exam prep student’s readiness to pass an exam. Solomon Pass Probability is based on thousands of student data points. Once a Solomon student has taken at least five practice exams, the Solomon Pass Probability feature is activated, and the Pass Probability metric is available in the student’s dashboard. The Solomon Remediation Report provides an additional level of customized study support by helping students focus their efforts and remediate before they sit for their exam.
Question: A Municipal Finance Professional (MFP) hosted a $500 plate fundraiser for a governmental issuer. Does this event trigger a ban on business for two years?
A. Yes, it will trigger a ban because an MFP may not host a fundraiser.
B. Yes, it will trigger a ban because the cost per plate is above the de minimis amount.
C. No, it will not trigger a ban because the MFP did not contribute money, only time and space.
D. No, it will not trigger a ban because the MFP was holding the fundraiser, not the municipal dealer.
Correct Answer: A
Explanation: MFPs are not permitted to solicit funds for municipal issuers or their officials without triggering a two-year ban on business for their firm. Thus, holding fundraisers is not allowed. Municipal dealers are also forbidden from holding fundraisers.
To explore free samples of Solomon Exam Prep’s industry-leading online exam simulators for the SIE, Series 7, Series 14, Series 50, Series 52, Series 54, and other FINRA, MSRB, NASAA, and NFA exams, visit the Solomon website here.
Read Solomon Exam Prep’s expert guide for answering state registration questions on the Series 63, Series 65, and Series 66 exams. Continue reading
If you’re planning to take the NASAASeries 63, Series 65, or Series 66 exam, you can expect to see questions about when broker-dealers and their securities agents need to register in a particular state. You can also expect to see questions about when investment advisers and investment adviser representatives need to register in a state. Instead of feeling intimidated when confronted with such questions, you should relax, smile, and feel confident. That’s because if you follow the simple rules that we’re about to describe, you should get each of these questions right.
Broker-Dealers and Their Agents
First let’s deal with questions about state registration for broker-dealers (BDs) and their agents. Rule number one here is that when a U.S.-based BD or one of its agents has an office located in a state, that BD or agent must register in the state. It does not matter which types of clients a BD or BD agent with an office in a state has or what types of securities those clients buy from the BD or agent. A BD or agent with an office in a state must register in that state. Period.
What about a BD or BD agent that doesn’t have an office in a state? If a BD or BD agent without an office in a state has any non-institutional clients in that state, the BD or agent must register there. However, if the BD or agent without an office in a state has only institutional clients in the state, no registration in that state is required. Institutional clients include the issuers of securities involved in a specific transaction; other broker-dealers; and institutional buyers, which are big-money entities such as banks, insurance companies, mutual funds, and pension and profit-sharing plans.
Key takeaway:
So when presented with a question about whether a specific broker-dealer or one of its agents must register in a given state or states, there are two potential questions to ask yourself. The first question is: “Does the broker-dealer or BD agent have an office in the state?” If the answer is yes, it’s simple: the BD or agent must register in that state. End of questions. However, if the answer is no, move on to the second question: “Does the BD or BD agent have any non-institutional clients in the state?” If the answer is yes, the BD or agent must register in the state; if the answer is no, they do not need to register in the state.
Here’s a flowchart to help you remember the question-answering process:
Investment Advisers and Their Representatives
Now let’s look at the state registration requirements for investment advisers that do not register with the SEC. If the investment adviser has an office in the state, it must register there. If the investment adviser doesn’t have an office in the state but has had more than five non-institutional clients in the state during the past twelve months, it also must register there. The rules are the same for investment adviser representatives who work for an investment adviser that does not register with the SEC.
Investment adviser representatives who work for investment advisers that register with the SEC — also known as federal covered advisors — may need to register with the state if they have an office in the state.
Key takeaway:
So if you see a question about state registration requirements for non-SEC registered investment advisers or their investment adviser representatives, the first question to ask yourself is: “Does the IA or IAR have an office in the state?” If the answer is yes, you know the IA or IAR must register there. If the answer is no, move on to the second question: “Has the IA or IAR had more than five non-institutional clients in the state during the preceding twelve months?” If the answer is yes, they must register in the state; if the answer is no, they don’t need to register in the state.
Here’s another flowchart to help you with this type of question:
Remember that if an investment adviser registers with the SEC, it is a federal covered adviser and does not need to register in any state. Instead, a federal covered adviser must notice file to provide investment advice to residents of that state. When it comes to notice filing requirements for federal covered advisers, follow the same thought process as that described above. If the federal covered adviser has an office in a state, it must notice file there. If it has no office in the state but it has had more than five non-institutional clients in the state in the past twelve months, the firm must also notice file there.
Practice question
Simple, right? So let’s put the suggested thought process into practice by looking at a question like one you may see on your exam.
XYZ Broker Dealer has its main office in State A. It also has offices in States B and C. XYZ has non-institutional clients in states A and B, but it only has institutional clients in State C. It does not have an office in State D, but it has three non-institutional clients there. In which states does XYZ need to register?
A. State A only
B. States A and B only
C. States A, B, and C only
D. States A, B, C, and D
Remember the process to follow when you see questions about where a BD must register. There are two possible questions to address as part of that process.
First question: Does the broker-dealer have an office in a state? Answer: XYZ has offices in each of States A, B, and C. Recall that if the answer the first question is “yes, the BD has an office in the state”, then the BD must register in that state. So XYZ needs to register in States A, B, and C.
If the answer to the first question is no, as it is for State D, you move on to the second question: Does the BD have any non-institutional clients in the state? XYZ has non-institutional clients in State D, so the answer is yes to that question. If the answer to the second question is yes, this means the BD must register in the state. Thus, XYZ has to register in State D as well as States A, B, and C. So Choice D is the correct answer.
So now you’re an expert, and you’re one step closer to passing your Series 63, Series 65, or Series 66 exam!
Want more exam tips?
Watch a video version of “How to Answer State Registration Questions on the Series 63, Series 65, and Series 66” on the Solomon YouTube channel, where you’ll find even more exam and study tips!
Solomon Exam Prep has helped thousands pass their securities licensing exams, including the SIE and the Series 3, 6, 7, 14, 22, 24, 26, 27, 28, 50, 51, 52, 53, 54, 63, 65, 66, 79, 82 and 99.
Test candidates are bound by guidelines that prohibit cheating or using any unfair means during the exam. Continue reading
On July 13, 2020, FINRA and NASAA responded to the pandemic testing challenge posed by in-person test centers with Prometric’s ProProctor, an online testing service, for certain qualifications exams. The exams for which online testing is permitted are the FINRA Securities Industry Essentials (SIE), Series 6, Series 7 and the NASAA Series 63, Series 65, and Series 66 exams. Read more about the announcement here.
Curious about what the ProProctor online testing experience looks like? Click here to find out.
It is interesting to note that although the exams are proctored remotely, candidates are still bound by guidelines that prohibit cheating or using any unfair means during the exam. The checks that have been put in place especially for remote testing are as follows:
Candidates are required to provide a 360° view of his/her workstations and surrounding environment;
A camera (external or embedded) is required during the course of the exam. If an embedded camera is used, a large free-standing mirror is also required in order to reflect unseen areas;
Candidates are asked to participate in a visual person check (including a sleeve, pocket and glasses check);
While the exam is in progress, candidates are prohibited from leaving, moving out of or obstructing the camera view while the exam is in progress without prior authorization from the proctor; and
Warning: a candidate found cheating in an online test will be subject to the same disciplinary actions that he/she would be subject to in a physical test, and if found guilty, can be permanently barred from the broker-dealer industry.
In preparation for the October 1 launch of the Securities Industry Essentials (SIE) exam, Solomon Exam Prep teamed with NASA to send Solomon SIE exam study materials to the Red Planet. Continue reading
In preparation for the October 1 launch of the Securities Industry Essentials (SIE) exam, Solomon Exam Prep teamed with NASA to send Solomon SIE exam study materials to the Red Planet.
Unlike other FINRA securities licensing exams, the SIE exam will be open to anyone 18 years or older who is interested in the securities industry. FINRA has not publicly stated whether Martians will be permitted to take the SIE exam but since FINRA is dedicated to “investor protection” and to promoting “market integrity” Solomon takes the position that investors and markets on other planets can benefit from securities education, and the SIE in particular. Solomon has helped thousands of earthlings pass their Series 7, Series 6, Series 65, Series 63, Series 24, Series 50, Series 79 and other securities licensing exams.
Elon Musk has not responded to the news of the joint NASA/Solomon Exam Prep mission.
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
The weighting of the exam sections has been modified to put more emphasis on the registration of broker-dealers over investment advisers
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
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.
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
The passing score has been lowered from 75% to 73%.
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
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.
Solomon Exam Prep is happy to release this month’s edition of “Solomon’s Industry News.” Continue reading
Solomon Exam Prep is happy to release this month’s edition of “Solomon’s Industry News.” Every month we will send out industry updates from the past month, so you can stay current and up-to-date on everything that is happening here at Solomon Exam Prep and in the industry.
“I passed my Series 63 today with an 85% and Series 6 two weeks back with an 80%…” Continue reading
“I passed my Series 63 today with an 85% and Series 6 two weeks back with an 80%. I was very nervous, but studying was made easy with Solomon Exam Prep; their simple Plain English explanations helped fight that legalese on the Series 63 especially. I totally owe this to the Solomon team, their awesome question bank, and friendly staff. “Ask the Professor” is prompt in answering all your queries. I’m definitely recommending their program to my employer.”
Solomon Exam Prep is happy to release this month’s edition of “Solomon’s Industry News.” Continue reading
Solomon Exam Prep is happy to release this month’s edition of “Solomon’s Industry News.” Every month we will send out industry updates from the past month, so you can stay current and up-to-date on everything that is happening here at Solomon Exam Prep and in the industry.
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.
