Series 63 practice questionhardDe Minimis Exemption and Solicitation
A state-registered IA with no office in State V holds a seminar and solicits 10 potential retail clients in State V but does not yet have any clients there. Under the USA, must the IA register in State V?
- ANo, because the de minimis exemption is based on actual clients, not solicitations✓ Correct answer
- BYes, because seminars count as transacting business
- CYes, because more than 5 people were solicited
- DNo, because the firm is state-registered elsewhere
Explanation
Why A — No, because the de minimis exemption is based on actual clients, not solicitations
The de minimis exemption is triggered by the number of actual non-institutional clients, not those solicited (Section 403(b)(2)). Solicitation alone does not require registration.
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