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← Series 63: Regulation of Broker-Dealers & Agents
Series 63 practice questioneasyExemptions — Broker-Dealer Exemptions

Which of the following broker-dealers is MOST LIKELY exempt from registration in a state?

  1. AA firm that maintains a branch office in the state and serves retail clients
  2. BA firm with no office in the state that deals exclusively with insurance companies in that state✓ Correct answer
  3. CA firm that advertises its services to the general public in the state
  4. 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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