Series 63 practice questionmediumAgent registration—private placements
An individual represents a broker-dealer in selling private placements to high-net-worth individuals in State S. Under the USA, must this individual register as an agent?
- AYes, because they are representing a broker-dealer in effecting securities transactions.✓ Correct answer
- BNo, because private placements are exempt transactions.
- CNo, unless the clients are institutional investors.
- DYes, only if the securities are not federally covered.
Explanation
Why A — Yes, because they are representing a broker-dealer in effecting securities transactions.
Anyone effecting securities transactions for a broker-dealer must register as an agent, regardless of the exemption status of the transaction (USA Sec. 401(b)). Exempt transactions do not exclude broker-dealer representatives from registration.
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