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← Series 63: Regulation of Broker-Dealers & Agents
Series 63 practice questionmediumAgent Registration — Transfer

In a state-law practice set, a candidate reviews the following scenario. The exam wants the best state-securities answer, not a practical business answer. Agent Tom leaves Broker-Dealer X and joins Broker-Dealer Y in the same state. What must occur for Tom to legally sell securities through Broker-Dealer Y?

  1. ABroker-Dealer Y must file a new registration application for Tom with the state Administrator✓ Correct answer
  2. BTom must wait 30 days before conducting any business with Broker-Dealer Y
  3. CTom's existing registration automatically transfers to Broker-Dealer Y
  4. DTom needs only to notify the Administrator by letter that he has changed firms
Explanation

Why A — Broker-Dealer Y must file a new registration application for Tom with the state Administrator

Under the USA, an agent's registration is linked to the employing broker-dealer. When an agent changes firms, the new broker-dealer must file a registration application for that agent. The registration does not automatically transfer. Tom cannot legally transact business through Broker-Dealer Y until the new registration is effective. The exam trick is the framing, not the underlying Uniform Securities Act rule.

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