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← Series 79: Section 4
Series 79 practice questioneasyBroker-Dealer Registration

Under the Securities Exchange Act of 1934, which of the following entities is required to register as a broker-dealer with the SEC?

  1. AA company that exclusively trades securities for its own proprietary account and does not handle customer orders
  2. BAn issuer selling its own securities directly to investors without using an intermediary
  3. CA bank that limits its securities activities to those permitted under the Gramm-Leach-Bliley Act
  4. DA firm that regularly engages in the business of effecting securities transactions for the accounts of others✓ Correct answer
Explanation

Why D — A firm that regularly engages in the business of effecting securities transactions for the accounts of others

Section 15(a) of the Securities Exchange Act of 1934 requires any person engaged in the business of effecting transactions in securities for the account of others to register as a broker-dealer with the SEC. Banks, issuers selling their own securities, and certain proprietary traders may qualify for exemptions from this registration requirement. The key trigger is regularly conducting securities transactions on behalf of customers as a business activity.

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