Series 63 practice questioneasyNet Capital Requirements
Which of the following is TRUE regarding a state Administrator’s ability to set net capital requirements for broker-dealers?
- AThe Administrator can set net capital requirements higher than those required by the SEC.
- BThe Administrator must never require any net capital.
- CThe Administrator may set net capital requirements, but never higher than SEC or federal levels.✓ Correct answer
- DThe Administrator's requirements always supersede federal law.
Explanation
Why C — The Administrator may set net capital requirements, but never higher than SEC or federal levels.
Under USA Section 402(d), Administrators may set net capital requirements for broker-dealers, but not above those required by the SEC. Answers A and D contradict federal preemption, and B is false as states may set requirements (within limits).
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