Series 63 practice questionmediumIA Exemptions and Exclusions — De Minimis Exemption
An investment adviser located in State A has no office in State B and provides advice to five retail (non-institutional) clients in State B during the past 12 months. Under the Uniform Securities Act, does the adviser need to register in State B?
- AYes, because the adviser has five clients in State B.
- BNo, because the de minimis exemption applies.✓ Correct answer
- CYes, because institutional clients are not involved.
- DNo, because the adviser does not have an office in State B.
Explanation
Why B — No, because the de minimis exemption applies.
The USA provides a de minimis exemption for advisers with no place of business in the state who have no more than five non-institutional clients in that state in the preceding 12 months (USA Section 403(b)(2)).
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