NASAA Series 63Regulation of Broker-Dealers and AgentsEasy
An individual is employed by a state-registered broker-dealer. Their primary duties involve managing the firm's social media accounts, creating marketing materials, and occasionally distributing investment brochures prepared by the firm's registered agents. They do not solicit clients, take orders, or receive commissions based on transactions. Is this individual required to register as an agent under the Uniform Securities Act?
- ANo, because their activities are purely administrative and do not involve soliciting or transacting securities business.
- BYes, because distributing investment brochures constitutes offering securities.
- CNo, unless they receive compensation directly tied to the sale of securities.
- DYes, because they are employed by a broker-dealer and engage in activities related to securities.
Show answer & explanationAnswer & explanation
Correct answer: A. No, because their activities are purely administrative and do not involve soliciting or transacting securities business.
An individual is considered an agent if they represent a broker-dealer in effecting or attempting to effect purchases or sales of securities. This individual's duties are primarily marketing and administrative, not soliciting or transacting securities business, thus they are not required to register as an agent.
Why the other options are wrong
- B. Distributing prepared materials, without soliciting or taking orders, is typically considered administrative support, not an offer.
- C. While commission-based compensation is a strong indicator, the core definition rests on 'effecting or attempting to effect' transactions, which is absent here.
- D. Employment by a BD alone does not trigger agent registration; the nature of duties is key.
Agent Definition (USA)
Under the Uniform Securities Act, an 'agent' is any individual who represents a broker-dealer or issuer in effecting or attempting to effect purchases or sales of securities.
- Registration is required for individuals meeting this definition unless an exclusion or exemption applies.
- Clerical or administrative personnel are generally excluded.
- Compensation structure (e.g., commissions) can be a factor but is not the sole determinant.
Memory trick: An Agent Acts for Transactions.