Series 63 practice questionmediumLimited transaction exemption
Which of the following scenarios would allow a broker-dealer to avoid registration in a state?
- AIt opens an office in the state and solicits retail clients.
- BIt sells securities to a bank in the state without a place of business there.✓ Correct answer
- CIt hires agents located in the state to solicit clients.
- DIt advertises broadly to the public in the state.
Explanation
Why B — It sells securities to a bank in the state without a place of business there.
Broker-dealers with no office, dealing only with institutions (like banks), are exempt per USA 401(b)(2). Offices (A) or agents (C) negate exemption; broad ads (D) generally require registration.
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