Series 63 practice questioneasyBroker-dealer registration requirement
A firm located in State Y has no office in the state and does not do business with the public in State Y. It only deals with institutional clients. According to the USA, must this firm register as a broker-dealer in State Y?
- ANo, because it has no office and only deals with institutions.✓ Correct answer
- BYes, all firms must register in every state.
- CYes, because it transacts business in securities.
- DNo, because it is exempt if it only deals with employees of the issuer.
Explanation
Why A — No, because it has no office and only deals with institutions.
A firm with no office in the state that only deals with issuers, other broker-dealers, or institutional investors does not need to register in that state (USA Sec. 401(c)(2)). Registration is not required simply for transacting business with institutions in other states.
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