Series 63 practice questionmediumBroker-Dealer Registration — Scenario
In a state-administrator case study, the scenario starts here. Read it as a Uniform Securities Act issue rather than a federal-law issue. ABC Securities, a broker-dealer registered in State X, opens a new branch office in State Y where it is not yet registered. An agent at the new office begins soliciting clients in State Y. Which statement is TRUE?
- AThe agent may solicit clients because the firm is registered in State X
- BThe firm must register as a broker-dealer in State Y before conducting business there✓ Correct answer
- CThe firm is exempt from registration in State Y because it already holds a federal registration
- DThe agent may solicit institutional clients only in State Y without registration
Explanation
Why B — The firm must register as a broker-dealer in State Y before conducting business there
Under USA Section 201, a broker-dealer must be registered in each state where it conducts business. Registration in one state does not extend to another. ABC Securities must register in State Y before any of its agents may solicit clients there, regardless of the type of client being solicited. The governing USA principle is unchanged even though the framing is different.
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