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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 AHas 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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