Series 63 Exam Prep: Role of the Administrator 📝

Series 7 whisperer discussed the role of a state regulator, the administrator, in overseeing security transactions as tested on the Series 63 Exam. He explains the concept of an offer and how it can be regulated, as well as the distinction between an offer and a sale in the context of share transactions. He also elaborated on the registration process with the administrator, the powers of the administrator, and the importance of record keeping for broker dealers and Federal IAs as tested on the Series 65 and Series 66 Exam also

discussed the role of the state regulator, the administrator, who oversees security transactions within a state. They explained that the administrator's jurisdiction extends to all securities transactions in the state, unless exempt. Kenneth also elaborated on the concept of an offer, which is the attempt to buy or sell securities, and how it can be regulated by the state administrator. They provided examples to illustrate their points and highlighted the distinction between an offer and a sale in the context of share transactions. Lastly, they clarified that certain actions, such as giving shares as a gift, using shares as a pledge for a loan, and stock dividends, cash dividends, and mergers, are not considered offers and sales.


Administrator Jurisdiction and Registration Process as tested on the Series 63 Exam,Series 65 and Series 66 Exam

discussed the jurisdiction of an administrator in relation to offers originating, directed, or received across different states. They highlighted that the administrator would have jurisdiction if the offer more than 1 state, even if the person residing in one state was only temporarily present in another. Kenneth also explained the registration process with the administrator, emphasizing that they cannot deny an application for lack of experience, but can for lack of knowledge or other issues. They outlined the potential reasons for an application denial, including misleading information, incomplete applications, unpaid fees, suspension in another state, violations of securities laws, and statutory disqualification.


Registration Suspension Process as tested on the Series 63 Exam,Series 65 and Series 66 Exam
explained the process of registration suspension, denial, and revocation by an administrator. They highlighted that once a registration is suspended, an individual can apply for a hearing within 60 days, which the administrator must provide within 15 days. They shared their personal experiences with the process, including a situation where a firm's COO was initially denied registration in a specific state.


Administrator Powers and Withdrawal Processes as tested on the Series 63 Exam,Series 65 and Series 66 Exam

elaborated on the powers of the administrator, detailing their ability to inspect firms, issue subpoenas, and demand cease and desist orders. They explained that while these administrative actions lack legal bite, the administrator can refer cases to the courts for more severe actions, such as injunctions or even potential jail time. differentiated between full and partial withdrawals from a state, explaining that the process depends on the reasons for withdrawal. shared an example of a firm in Ohio that had to register due to its strict definition of an institution.

discussed the distinctions between various terms related to business operations and regulations, such as laws, rules, orders, cancellations, withdrawals, and suspensions. They highlighted that laws apply to everyone, while rules are specific to certain types of professionals. Orders are targeted at specific individuals or firms. we also explained the potential consequences of wrongdoing, such as fraud or mistakes, noting that administrators can only pursue civil matters and that the penalties for criminal acts can lead to jail time or fines. They further discussed the concept of an offer of rescission, which involves returning the original investment plus a bit of interest and costs to the affected customer.


Statute of Limitations and Record Keeping Importance

They highlighted that the statute of limitations for criminal matters is 5 years, while for civil matters, it's a maximum of 3 years from the time of discovery. Kenneth also discussed the importance of record keeping, specifically for broker dealers ( 3 years) and IAs ( 5 years)





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Ken Finnen Chatham NJ