Series 63 practice questionhardBD exemption - advertising
A broker-dealer with no office in State G places an online advertisement accessible to State G residents, but only responds to inquiries from institutional clients in State G. Under the USA, which of the following is true?
- AThe BD is exempt from registration, provided all clients are institutions.✓ Correct answer
- BThe BD must register since the ad is accessible to State G residents.
- CThe BD and its agents must both register regardless of clients.
- DThe BD is exempt only if it restricts the ad to institutions physically located outside State G.
Explanation
Why A — The BD is exempt from registration, provided all clients are institutions.
The exemption remains if the BD only does business with institutions and has no office, even if the ad is accessible to the public (USA 401(b)(2)). Registration is not required in this case.
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