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← Series 63: Regulation of Broker-Dealers & Agents
Series 63 practice questionhardAgent Registration — Scenario

During a compliance drill, focus on how the Uniform Securities Act applies here. The exam wants the best state-securities answer, not a practical business answer. Marcus is an agent registered with a broker-dealer in State A. He receives a phone call from an existing client who recently moved to State B, where neither Marcus nor his broker-dealer is registered. The client asks Marcus to execute a trade. What should Marcus do?

  1. AExecute the trade since the client initiated the contact
  2. BDecline to execute the trade until both he and his broker-dealer are properly registered in State B✓ Correct answer
  3. CExecute the trade because the client relationship was established in State A
  4. DExecute the trade as long as he files for registration in State B within 30 days
Explanation

Why B — Decline to execute the trade until both he and his broker-dealer are properly registered in State B

Under USA Section 201, both the broker-dealer and the agent must be registered in the state where the client resides. Even though the client initiated the call and the relationship was established in another state, effecting transactions for a client domiciled in State B without registration there would violate the Act. Marcus must decline until proper registration is obtained. This variant keeps the same legal rule but shifts the setup so recall has to stay flexible.

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