Series 63 practice questionmediumLoss of Federal Covered Status
If a federal covered adviser's AUM drops below $90 million, what must it generally do?
- ARemain registered with the SEC
- BRegister with the state(s) where it has clients✓ Correct answer
- CRegister with both SEC and state
- DCease all business until AUM increases above $100 million
Explanation
Why B — Register with the state(s) where it has clients
If AUM falls below $90 million, the adviser must usually switch to state registration (USA Sec. 403; SEC rules). A is incorrect as it does not meet federal covered adviser threshold.
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