What is the Series 63 Exam?
The Series 63, officially the Uniform Securities Agent State Law Examination, tests knowledge of state securities regulations. It's required in most states for securities professionals who want to transact business within that state.
The Series 63 is administered by NASAA (North American Securities Administrators Association) and delivered through FINRA.
Series 63 Quick Facts
| Feature | Details |
|---|---|
| Full Name | Uniform Securities Agent State Law Exam |
| Administrator | NASAA (via FINRA) |
| Questions | 65 (60 scored, 5 unscored) |
| Time Limit | 75 minutes |
| Passing Score | 72% (43 out of 60) |
| Cost | $147 |
| Prerequisite | Series 7, 6, or 22 (or taken same day) |
| Pass Rate | ~72-75% |
Who Needs the Series 63?
You need the Series 63 if you:
- Work for a broker-dealer
- Sell securities products to retail clients
- Already passed (or are taking) Series 7 or Series 6
- Need state registration as a securities agent
Note: Some states accept the Series 66 instead, which combines Series 63 + 65 content.
States Requiring Series 63
Most states require either the Series 63 or Series 66 for agent registration. A few states have their own state exams or additional requirements.
| Category | States |
|---|---|
| Series 63 Required | Most states (40+) |
| Series 66 Accepted | All states that accept 63 |
| Additional Requirements | CA, FL, TX, others (may have state-specific exams) |
Series 63 Exam Content
Content Breakdown
| Section | Percentage | ~Questions |
|---|---|---|
| Regulations of Securities and Issuers | 28% | 17 |
| Regulations of Persons | 33% | 20 |
| Prohibited Practices | 39% | 23 |
Key Topics by Section
1. Regulations of Securities & Issuers (28%)
| Topic | Key Points |
|---|---|
| Registration Methods | Coordination, qualification, filing |
| Exempt Securities | Federal covered, government, bank securities |
| Exempt Transactions | Isolated, institutional, private placements |
| Registration Requirements | Filing, fees, effectiveness |
Exempt Securities (Memorize These):
- U.S. Government securities
- Municipal bonds
- Bank-issued securities
- Insurance company securities (policy contracts)
- Federal covered securities (NYSE, NASDAQ listed)
Exempt Transactions:
- Isolated non-issuer transactions
- Transactions with institutional investors
- Private placements (limited offers)
- Unsolicited orders
- Transactions with existing security holders
2. Regulations of Persons (33%)
| Entity | Registration Required? |
|---|---|
| Broker-Dealer | Yes, if place of business in state or retail clients |
| Agent | Yes, if effecting transactions in state |
| Investment Adviser | Yes, unless federal covered |
| IAR | Yes, if working for state-registered IA |
Exclusions from Definitions:
- Banks and bank employees (from BD/agent)
- Certain professionals giving incidental advice (from IA)
- Publishers of general circulation (from IA)
3. Prohibited Practices (39%)
This is the largest section - focus heavily here!
| Prohibited Practice | Description |
|---|---|
| Churning | Excessive trading for commissions |
| Front-running | Trading ahead of customer orders |
| Selling away | Private securities transactions without approval |
| Borrowing from clients | Prohibited without firm approval |
| Guaranteeing against loss | Cannot guarantee investment returns |
| Sharing in accounts | Limited sharing only with approval |
| Unsuitable recommendations | Must match customer profile |
| Material misrepresentation | False statements to sell securities |
| Market manipulation | Wash sales, matched orders |
Fiduciary Duties:
- Act in client's best interest
- Disclose conflicts of interest
- Provide suitable recommendations
- Maintain confidentiality
Study Strategy
Recommended Study Time
| Approach | Hours | Timeline |
|---|---|---|
| Intensive | 15-20 | 1-2 weeks |
| Standard | 20-30 | 2-3 weeks |
| Part-time | 30-40 | 3-4 weeks |
The Series 63 is one of the shorter securities exams - don't over-study!
Study Priority by Weight
-
Prohibited Practices (39%) - Most important!
- Unethical conduct scenarios
- Fiduciary responsibilities
- Specific violations
-
Regulations of Persons (33%)
- Who must register
- Exclusions and exemptions
- Registration process
-
Securities & Issuers (28%)
- Exempt securities list
- Exempt transactions
- Registration methods
Key Numbers to Memorize
| Item | Number |
|---|---|
| Administrator stop order | 10 business days |
| Exam passing within application | 2 years |
| Agent registration effective | Noon, 30th day |
| Recordkeeping requirement | 3 years minimum |
| Consent to service of process | Until revoked |
Common Mistakes to Avoid
1. Confusing Exemptions
- Exempt securities = the security itself is exempt
- Exempt transactions = the transaction is exempt (security may still need registration)
2. Missing "EXCEPT" Questions
Many questions ask "All of the following are prohibited EXCEPT..." Read carefully!
3. Overlooking Registration Triggers
Remember what triggers registration:
- Place of business in state
- Directed communications to state residents
- More than a de minimis number of clients
4. Fiduciary vs. Suitability
- Investment advisers = fiduciary duty (highest standard)
- Broker-dealers = suitability standard
Sample Question Types
Scenario Questions
"An agent recommends a high-risk investment to an 80-year-old client with a conservative profile. This is an example of..."
Answer: Unsuitable recommendation (prohibited practice)
Definition Questions
"Which of the following is excluded from the definition of an investment adviser?"
Look for: banks, lawyers (incidental advice), publishers
Exemption Questions
"Which of the following securities is exempt from state registration?"
Look for: government securities, municipal bonds, bank securities
Exam Day Tips
Before the Exam
- Review prohibited practices one more time
- Get good rest
- Arrive 30 minutes early
- Bring two forms of ID
During the Exam
- 65 questions in 75 minutes = ~1.15 minutes per question
- Flag difficult questions and return later
- Read every word - watch for "NOT" and "EXCEPT"
- Trust your first instinct on most questions
After the Exam
- Results displayed immediately
- If passed, wait for FINRA processing
- Register in states where you'll do business
Series 63 vs Other State Exams
| Exam | Content | When to Use |
|---|---|---|
| Series 63 | State securities law (sales) | With Series 7 or 6 |
| Series 65 | Investment adviser law | Standalone for IAR |
| Series 66 | Combined 63 + 65 | With Series 7 for full authority |
Decision Tree
Do you have/want Series 7?
├── Yes → Do you want IA authority?
│ ├── Yes → Take Series 66
│ └── No → Take Series 63
└── No → Do you want IA authority only?
└── Yes → Take Series 65
After Passing
State Registration
- Apply in each state where you'll work
- Pay state registration fees
- Complete any state-specific requirements
- Maintain registration through broker-dealer
Continuing Education
- Complete FINRA Regulatory Element annually
- Complete state-specific CE if required
- Stay current on regulatory changes