Practice Quiz

FINRA Series 63 (NASAA)

Category - Series 63

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Mr. Sailor is cruising through the Bahamas when he learns that a healthcare company in which he owns stock is being sued by former patients, doctors, nurses, and even the federal government. He doesn’t have his broker’s number handy, and he doesn’t have internet access, so he calls his son and tells him to call the broker and instruct the broker to sell his shares. As a registered agent for his broker, you take the call. Should you execute this transaction?
  1. Yes. This is a legitimate request from a client, and you are required to follow the client’s instructions.
  2. No, not unless you and your broker-dealer have a written document that gives Mr. Sailor’s son the power-of-attorney to trade on his account.
  3. Yes, as long as the son presents proper identification that proves his relationship to Mr. Sailor, such as a birth certificate.
  4. Yes, as long as the son is at least 21 years old and not a minor child.
Explanation
Answer: B - No, you cannot execute this transaction unless you and your broker-dealer have a written document that gives Mr. Sailor’s son the power-of-attorney to trade on his account. Otherwise, you will be executing an order from an unauthorized third party, which is a prohibited practice, and you can lose your license for doing so.
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