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← Series 63: Regulation of Broker-Dealers & Agents
Series 63 practice questionmediumCanadian BD: Retirement Accounts

A Canadian broker-dealer, properly exempt in State Y, has a client who was a Canadian resident but moved to State Y six months ago and still maintains a Canadian RRSP (retirement account) with the BD. What is the BD’s registration obligation under the USA?

  1. AThe BD may continue servicing the account only if the client is a temporary U.S. resident.
  2. BThe BD may service only existing Canadian retirement accounts but not open new accounts for the client.✓ Correct answer
  3. CThe BD must register as a US broker-dealer in State Y or cease servicing the account.
  4. DThe BD can continue servicing the account with no need for further action.
Explanation

Why B — The BD may service only existing Canadian retirement accounts but not open new accounts for the client.

USA §401(b)(2)(B)(iii) allows Canadian BDs to service existing Canadian retirement accounts for former Canadian residents now in the U.S. No new accounts can be opened, and the exemption does not otherwise extend to new business.

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