The most common Series 63 sticking points that we see may add an extra week to your studying. In today’s post, we cover the most confusing topics on this exam.
Series 63 sticking points: What to Watch
The Series 63 exam has a few confusing areas. Most confusing for most people are the exempt transactions and exempt securities.
Both require understanding why each would be exempt. Or, in other words, why each of them would not have to be registered or reported to state regulators.
One simple rule of thumb is that if the transaction or the security poses a potential threat to the general public, it likely needs to be registered.
Other areas of confusion involve breaking down the definitions of a broker dealer and an agent.
And then, you must be able to identify investment advisors and investment advisor representatives. All of them have strict legal definitions on this exam and understanding those definitions will help clarify and clearly delineate their differences.
Spoiler: Broker dealers get paid commissions (or mark-ups and mark-downs) to transact, whereas investment advisors get paid fees to give advice.
Communications
This section tends to be the lowest score on most students’ practice exams after most other sections are cleaned up. One reason being that there are several regulations that strictly require memorization.
Make sure you know the difference between retail communications and correspondence. But at a more granular level, you’ll have to know when communications need preapproval, or when they need to be filed with the administrator.
The easier portion of this section involves understanding that institutional communication communications tend to have less regulation. Consistent with many other roles and regulations at the state level, institutional engagement typically requires less stringent observation by the regulators.
Overall, the Series 63 exam is one of the last regulatory exams for most people. There are a few areas that can be confusing, but with enough practice, you can get across the finish line. Feel free to reach out if you need any help. Good luck!