Series 63 practice questionhardIA Exemptions and Exclusions — Administrator’s Authority to Deny Exemptions
Under the Uniform Securities Act, which of the following best describes the state Administrator's authority regarding investment adviser exemptions for advisers doing business solely with other investment advisers and certain institutional clients?
- AThe Administrator is required to automatically grant exemptions to all advisers serving institutional clients.
- BThe Administrator can only revoke exemptions for advisers with a place of business in the state.
- CThe Administrator may not deny or revoke any exemption granted to investment advisers under any circumstances.
- DThe Administrator may, by rule or order, deny or revoke the exemption for an adviser doing business only with banks, investment companies, or other investment advisers.✓ Correct answer
Explanation
Why D — The Administrator may, by rule or order, deny or revoke the exemption for an adviser doing business only with banks, investment companies, or other investment advisers.
According to Section 403(b)(6) of the USA, the Administrator may, by rule or order, deny or revoke the exemption for an investment adviser doing business only with certain institutional clients such as banks, investment companies, or other investment advisers. This gives the Administrator discretion to protect investors by denying or revoking such exemptions. Therefore, option D is correct.
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