Series 63 practice questionmediumClient Counting Rules
A federal covered adviser with no place of business in State Z has six retail clients there in the past 12 months. The adviser must:
- ARegister with the SEC only
- BRegister with State Z
- CNotice file in State Z✓ Correct answer
- DTake no action
Explanation
Why C — Notice file in State Z
Having more than five clients in a state (without a physical office) triggers notice filing requirements under the USA (Sec. 405). B is preempted; A alone ignores the notice filing requirement.
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