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← Series 63: Regulation of Broker-Dealers & Agents
Series 63 practice questionmediumAdministrator Actions and Limitations

An Administrator of State P wishes to impose additional financial reporting requirements on a broker-dealer headquartered in another state but registered in State P. Which of the following limitations applies?

  1. AThe Administrator may impose any additional requirement at will.
  2. BThe Administrator may only impose requirements consistent with SEC rules and not more stringent.✓ Correct answer
  3. CThe Administrator must always defer to the broker-dealer's home state.
  4. DThe Administrator must obtain consent from FINRA before imposing additional requirements.
Explanation

Why B — The Administrator may only impose requirements consistent with SEC rules and not more stringent.

USA Section 402(d) preempts the Administrator from imposing requirements more stringent than those of the SEC. Home state rules (C) and FINRA consent (D) are not determinative, and (A) is incorrect as Administrators are limited by federal standards.

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