Series 79 practice questionhardBroker-Dealer Registration
A foreign bank’s U.S. branch provides advice incidental to securities transactions solely for existing commercial banking clients, does not accept securities orders, and does not hold itself out as a broker-dealer. Must the U.S. branch register as a broker-dealer under the Exchange Act?
- ANo, if the activity is truly incidental and the branch does not accept orders or act as a dealer✓ Correct answer
- BYes, because any advice relating to securities requires registration
- CYes, if the activity exceeds $100,000 per year in fees
- DNo, as long as the branch registers as an investment adviser
Explanation
Why A — No, if the activity is truly incidental and the branch does not accept orders or act as a dealer
The Exchange Act exempts banks whose advice is incidental and who do not execute securities transactions or hold themselves out as broker-dealers. The traps either overstate the registration requirement or confuse the issue with investment adviser registration.
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