Series 63 practice questionhardBroker-Dealer Registration — Scenario
Smith & Co., a registered broker-dealer in State A, changes its legal form from a partnership to a corporation. The principals and business operations remain unchanged. What must Smith & Co. do regarding its registration?
- ANothing, as the registration transfers automatically
- BImmediately cease all business until a new registration is approved
- CNotify clients but take no action with the Administrator
- DFile a successor firm amendment to its registration✓ Correct answer
Explanation
Why D — File a successor firm amendment to its registration
Under USA Section 202(b), when a registered broker-dealer changes its form of organization, the new entity is considered a successor firm. The successor may file an amendment to the existing registration rather than a new application, allowing business to continue without interruption while the Administrator is properly notified of the structural change.
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