NASAA Series 63Regulation of Broker-Dealers and AgentsMedium
An individual serves as a director and minority owner of Broker-Dealer XYZ. This individual performs only administrative and back-office management functions and does not sell securities, solicit clients, or supervise sales personnel. Under the Uniform Securities Act, is this individual considered an 'agent' of the broker-dealer?
- AYes, because all officers, directors, and owners of a broker-dealer are automatically deemed agents
- BNo, because a partner, officer, or director who does not perform the functions of an agent is not deemed an agent
- CYes, because any ownership interest in a broker-dealer creates agent status regardless of duties performed
- DNo, because directors of a broker-dealer are entirely excluded from the broker-dealer's definition
Show answer & explanationAnswer & explanation
Correct answer: B. No, because a partner, officer, or director who does not perform the functions of an agent is not deemed an agent
Under the Uniform Securities Act, being a partner, officer, or director of a broker-dealer does not by itself make a person an 'agent.' Agent status depends on whether the individual actually performs functions of an agent, such as effecting or attempting to effect securities transactions on behalf of the BD.
Why the other options are wrong
- A. Incorrect — title alone does not create agent status.
- C. Incorrect — ownership interest is irrelevant to the functional test for agent status.
- D. Incorrect — this confuses the BD definition (which doesn't apply to individuals) with the agent definition.
Functional Test for Agent Status
An individual's status as an 'agent' under the USA depends on whether they perform agent-like functions (selling/soliciting securities), not merely their title (partner, officer, director).
- Title alone (officer/director/partner) does not create agent status
- Selling, soliciting, or effecting transactions triggers agent status
- Purely administrative/management roles typically fall outside the definition
Memory trick: It's What You Do, Not What You're Called