Practice Quiz

FINRA Series 63 (NASAA)

Category - Series 63

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An agent working for a broker-dealer mistakenly sends an investment adviser some bonds that the adviser purchased on behalf of his client instead of directing the bonds to the financial institution that is serving as the qualified custodian of the client’s funds. If the investment adviser wants to avoid being considered custodian of this client’s account, what must the adviser do?
  1. Record what securities were sent, when he received them, and when he forwarded them--which
  2. Record what securities were sent, when he received them, and when he forwarded them--which must be within three business days-to his client.
  3. Record what securities were sent, when he received them, and when he forwarded them--which must be within twenty-four hours-to his client.
  4. Record what securities were sent, when he received them, and when he forwarded them--which must be within twenty-four hours-to the qualified custodian of the client’s funds.
Explanation
Answer: C - In order to avoid being considered custodian of his client’s account, the investment adviser needs to record what securities he had been sent, when he received them, and when he returned them-which must be within three business days-to the sender.
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