NASAA Series 63Remedies and Administrative ProvisionsEasy
An agent asks a client to sign a brokerage account agreement stating that the client waives any right to sue under the state's Uniform Securities Act in exchange for a reduced commission rate. Under the Act, this waiver provision is:
- AValid only if the client is an accredited investor
- BValid, but only enforceable against institutional clients
- CVoid, because any condition requiring a person to waive compliance with the Act is void
- DValid, because clients may contractually waive statutory rights for consideration
Show answer & explanationAnswer & explanation
Correct answer: C. Void, because any condition requiring a person to waive compliance with the Act is void
The Uniform Securities Act contains a non-waiver provision stating that any condition, stipulation, or provision binding a person to waive compliance with the Act is void. This protects investors regardless of sophistication or consideration offered.
Why the other options are wrong
- A. Accreditation status does not affect the non-waiver rule.
- B. The non-waiver rule applies to all investors, not just retail clients.
- D. Statutory rights under the Act cannot be waived by private contract regardless of consideration.
Non-Waiver Provision
The Uniform Securities Act voids any agreement, condition, or stipulation requiring a person to waive compliance with the Act.
- Protects investors from contractual waivers of statutory rights
- Applies regardless of investor sophistication
- Any such waiver clause is unenforceable as a matter of law
Memory trick: You can't sign away your shield.