Series 63 practice questionmediumIntrastate Adviser Exemption – Multistate Clients
An adviser located in State Z provides advice to 12 clients, all residents of State Z, and 1 client who just moved to State X. What is the adviser's status under the intrastate exemption?
- ANo longer eligible for the intrastate exemption.✓ Correct answer
- BStill exempt because only one client is out-of-state.
- CEligible only if the out-of-state client is institutional.
- DEligible if the adviser is registered with the SEC.
Explanation
Why A — No longer eligible for the intrastate exemption.
The intrastate exemption under the USA (Section 403(b)(3)) is available only if ALL clients are residents of the adviser's home state. Having even one out-of-state client invalidates the exemption.
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