Form U4, Outside Accounts, and Payments to Unregistered Persons
April 1, 2026
Review Form U4 obligations, outside-account controls, and compensation rules involving unregistered persons on Series 63.
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Series 63 expects candidates to know that agent regulation is not only about initial licensing. It also includes Form U4 filing discipline, rules around agent accounts at other firms, and restrictions on paying securities-based compensation to unregistered persons.
These questions reward candidates who think in terms of control boundaries. If compensation or securities activity flows to someone outside the registered framework, the answer is usually moving toward a violation rather than away from one.
Key Takeaways
Form U4 matters because registration information must stay current and accurate.
Outside-account and compensation questions usually test control over who may participate in securities business.
Series 63 favors answers that keep securities activity inside the registered and supervised framework.
Sample Exam Question
A broker-dealer wants to pay a securities-based referral fee to a person who is not registered. What is the strongest Series 63 reaction?
A. Allow it if the amount is small B. Treat it as a likely problem because securities-based payments to unregistered persons are tightly restricted C. Allow it if the customer agreed to the referral D. Allow it if the person has industry experience but no current registration
Answer: B. Series 63 expects candidates to recognize that payments tied to securities business cannot casually flow to unregistered persons.