Series 63 practice questionmediumBonding and Discretionary Authority
A broker-dealer in State Q does not physically hold client funds, but has discretionary authority over client accounts. Under the USA, which is most likely?
- AThe firm may be required to post a surety bond.✓ Correct answer
- BNo bond can be required without custody of funds.
- CThe firm is exempt from all financial reporting.
- DThe Administrator must require a bond.
Explanation
Why A — The firm may be required to post a surety bond.
Bonding may be required for custody OR discretionary authority (USA Section 202(c)). It is not mandatory but left to Administrator discretion.
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