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Series 63: Regulation of Broker-Dealers & Agents
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?

  1. AThe Administrator can set net capital requirements higher than those required by the SEC.
  2. BThe Administrator must never require any net capital.
  3. CThe Administrator may set net capital requirements, but never higher than SEC or federal levels.✓ Correct answer
  4. DThe Administrator's requirements always supersede federal law.
Explanation

Why CThe 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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