Series 63 practice questionmediumBD exemption - limited clients
State T has adopted the Uniform Securities Act. A broker-dealer located only in State Q has a single institutional client in State T and no office there. How should the BD proceed under the USA?
- ARegister in State T.
- BRely on the institutional exemption and not register in State T.✓ Correct answer
- CRegister only its agents in State T.
- DRegister as an investment adviser in State T.
Explanation
Why B — Rely on the institutional exemption and not register in State T.
The BD is exempt from registration in State T if its only business is with institutions and it has no office there (USA 401(b)(2)). Agent or adviser registration is not required in this scenario.
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