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← Series 63: Regulation of Broker-Dealers & Agents
Series 63 practice questionhardBroker-dealer definition—internet and advertising

A broker-dealer registered in State W maintains a website accessible to residents of all states, but only responds to inquiries from residents of State W. Under the USA, in which states must the broker-dealer register?

  1. AOnly in State W, provided it does not respond to out-of-state inquiries.✓ Correct answer
  2. BAll states where the website can be accessed.
  3. COnly in states where it advertises via the internet.
  4. DAll states where prospective clients reside.
Explanation

Why A — Only in State W, provided it does not respond to out-of-state inquiries.

Under the USA and NASAA internet rules, a website alone does not trigger registration in states where the BD does not respond to inquiries (USA Sec. 401(c)). Only responding to out-of-state clients or establishing relationships would require registration.

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