Uniform Securities Agent State Law (Series 63) Practice Exam

A "control person" in the context of an issuer refers to an individual who possesses significant influence over the management decisions of the issuer. This term generally applies to individuals who hold a substantial position of authority, such as executives or major shareholders, allowing them to affect the direction and operations of the company. This influence can be through ownership of a significant percentage of shares, voting rights, or formal responsibilities within the organization.

Control persons have a responsibility to act in the best interests of the shareholders and the company, and their decisions can have a substantial impact on the issuer's policies and practices. Recognizing who qualifies as a control person is essential for compliance with various securities regulations, as their transactions and activities can fall under scrutiny due to their potential to affect market integrity and investor protection.

The other options do not accurately define a control person. A shareholder with less than 5% ownership typically does not exert significant influence over management decisions, an individual with no influence over management decisions does not fit the definition, and a regulatory authority is an entirely different entity unrelated to the control dynamics within the issuer.