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← Series 63: Regulation of Broker-Dealers & Agents
Series 63 practice questioneasyBonding Requirements

A state Administrator may require a broker-dealer to post a surety bond as a condition of registration if the firm:

  1. AHas or may have custody of client funds or securities.✓ Correct answer
  2. BIs only executing proprietary trades.
  3. COnly sells federal covered securities.
  4. DDoes not maintain any office in the state.
Explanation

Why A — Has or may have custody of client funds or securities.

The Administrator may require a surety bond if the broker-dealer has or may have custody of client assets (USA Section 202(c)). The other choices do not automatically trigger a bonding requirement.

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