Series 63 practice questioneasyExemptions — Broker-Dealer Exemptions
Which of the following broker-dealers is MOST LIKELY exempt from registration in a state?
- AA firm that maintains a branch office in the state and serves retail clients
- BA firm with no office in the state that deals exclusively with insurance companies in that state✓ Correct answer
- CA firm that advertises its services to the general public in the state
- DA firm that employs 50 agents in the state
Explanation
Why B — A firm with no office in the state that deals exclusively with insurance companies in that state
Under USA Section 401(c), a broker-dealer with no office in a state that transacts business exclusively with institutional investors such as insurance companies is exempt from registration in that state. Firms with offices, agents, or retail clients in a state are generally required to register.
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