On a timed state-securities quiz, the scenario below appears. Assume the administrator is testing the cleanest state-law answer. ABC Wealth Management is an investment adviser with no office in State X. They have six clients in State X, all of whom are retail investors. According to the Uniform Securities Act, must ABC register as an investment adviser in State X?

Why A — Yes, because they have more than five clients in State X.

Under the USA, an investment adviser with no place of business in the state is exempt from registration only if it has no more than five non-institutional clients in the state in the preceding 12 months (the de minimis exemption). Since ABC has six retail clients, it exceeds the exemption threshold and must register. (USA § 403(b)(2)) The governing USA principle is unchanged even though the framing is different.