Series 63 Chapter 1 Continued
In some instances, rather than use an investment banker to distribute its securities to the public, an issuer will hire a sales force or use its own employees to make the sales. The individuals involved in the selling in this state would NOT be defined as agents under the Uniform Securities Act if selling on behalf of which of the following issuers?
A savings institution organized and supervised under the laws of any state NOT A credit union organized and supervised under the laws of this state Although each of the answer choices meets the USA's definition of exempt security, the savings association is the only issuer where the act grants an exemption from the definition of agent to those individuals selling on its behalf. Please note that a savings institution is not the same as a savings and loan or building and loan association. Check this in relation to your notes on exemptions
Under the Uniform Securities Act, which of the following qualifies as an investment adviser representative?
A solicitor for an investment advisory firm who is paid a fee for his services If the goal is obtaining clients for the investment adviser, a solicitor is considered an investment adviser representative under the Uniform Securities Act. An employee who performs clerical or administrative functions only is not an investment adviser representative. Precious metals are not securities, and a person advising on them is not considered an IAR. An agent is a representative of a broker-dealer.
Which of the following can only be a natural person?
An agent Only a natural person can be an agent; political subdivisions, business trusts, and limited liability companies are legal persons. Both legal and natural persons are subject to the Uniform Securities Act. Corporations, trusts, partnerships, associations, joint ventures, governments and their subdivisions, agencies, or instrumentalities, and any other legal or commercial entities are legal persons subject to the act.
Under the Uniform Securities Act, all of the following are specifically excluded from the definition of a broker-dealer EXCEPT
investment advisers Banks, issuers, agents, and certain out-of-state broker-dealers are excluded from the definition of broker-dealer. However, investment advisers frequently also carry registration as a broker-dealer.
Steven is registered as an agent with Maple Leaf Securities, a Canadian broker-dealer located in Toronto with no offices in the United States. One of Steven's clients has recently made a permanent move to Florida. Which of the following statements with respect to Steven is CORRECT?
As long as the only dealings with this client are with a previously established Canadian tax qualified retirement plan, Steven only has to file an application and a consent to service of process. Canadians have their equivalent of our IRA called an RRSP and, as long as the account is opened in Canada with a properly registered agent, that agent may continue to handle transactions in that account for clients who move out of the country.
A broker-dealer with an office in this state must register as an investment adviser if it charges I.commissions for selling securities II.commissions for selling securities while offering investment advice incidental to the sale of the securities III.a fee for selling investment research and additional fees in the form of commissions for the sale of securities IV.fees for investment research sold exclusively to institutions located in this state
III and IV A broker-dealer must register as an investment adviser if it charges a fee for selling investment research or any other form of investment advice, even to institutions. If a person is in the business of selling research for a fee, that person or firm must register as an investment adviser. If a broker-dealer charges commissions for selling securities and offers investment advice incidental to the sale of the securities, the broker-dealer need not register as an investment adviser because it is not compensated for the research.
An agent with a broker-dealer is suddenly called out of town on a personal family matter. While away, the agent's unregistered sales assistant receives a phone call from an existing client wishing to purchase 200 shares of a listed stock. What would be the most appropriate action for the sales assistant to take?
Route the call to a licensed agent in the office The fact that the order is unsolicited does not preclude the rule that under no circumstances shall an unregistered individual accept and place orders.
Investment advisers who manage investment portfolios that total less than $100 million must register with
a state only Investment advisers who manage less than $100 million of investment assets are generally prohibited from registering with the SEC and are required to register with a state Administrator unless exempt under the laws of that state.
An agent is very satisfied with the work being done by his unregistered sales assistant and would like to compensate her with 5% of his commissions. Under the NASAA Statement of Policy on Dishonest or Unethical Business Practices of Broker-Dealers and Agents, this would be
an unacceptable practice because only registered agents may receive sales related compensation NOT acceptable, but only if disclosed to all of the agent's clients Nothing fancy here—you can't get paid for securities sales unless you are licensed. Isn't that why you are taking this exam?
Sarah has not yet passed the Series 63 exam. As Jack's assistant, Sarah has frequent telephone contact with Jack's customers to whom she provides account information and current stock quotes. In this situation Sarah is
not in violation of any applicable statutes Provided Sarah does not solicit business, offer advice to customers, or accept orders, she has not committed a violation of any act.
Each of the following statements is true EXCEPT
the National Securities Markets Improvement Act of 1996 (NSMIA) requires states and the federal government to have identical registration requirements NOT the Uniform Securities Act is a template rather than the actual law of any state or territory of the United States NSMIA's purpose is to eliminate dual registration, not to require identical laws. The Uniform Securities Act is not the actual law of any state or territory. Rather, it is model legislation that states use as a guide in drafting their own securities laws. Those laws give the responsibility to the state Administrator for enforcement and administration of those laws. The Series 63 exam's content is the responsibility of NASAA. YOU READ THIS WRONG. KNOW THAT USA IS A TEMPLATE NOT AN ACTUAL LAW
Which of the following firms in the business of rendering investment advice for compensation would be considered a federal covered adviser?
ABC Money Managers, a partnership with $385 million under management It makes no difference what the structure of the adviser is. As long as the assets under management are $110 million or more, SEC registration is required. If the investment company is registered under the Investment Company Act of 1940, the adviser must be registered regardless of size. The Hedge Fund is an unregistered fund so the rule does not apply to it. Under the Dodd-Frank Act, the pension consultant must have $200 million under management to be eligible to be federal covered. SO DIDNT matter here that the structure of the advisor was a partnership
Under the Uniform Securities Act, which of the following is a broker-dealer?
Corporation that sells interests in an oil and gas limited partnership to investors with the proceeds going to the issuer A broker-dealer is any person that buys or sells for the accounts of others or for his own account. In this case, an entity structured as a corporation is selling a security in the form of limited partnership units and is therefore a broker-dealer. A broker-dealer is not an issuer or an agent.
Which of the following would be an agent under the terms of the Uniform Securities Act? I.A sales representative of a licensed broker-dealer who sells secondary securities to the general public II.An assistant to the president of a broker-dealer who, for administrative purposes, accepts orders on behalf of senior partners III.A subsidiary of a major commercial bank registered as a broker-dealer that sells securities to the public IV.An issuer of nonexempt securities that are registered in the state and sold to the general public
I and II Under the USA, only an individual can be an agent (a person who sells securities for a broker-dealer). An administrative person, such as the assistant to the president of a broker-dealer, is considered an agent if that individual takes securities orders from the public. Corporate entities, broker-dealers, and issuers are all excluded from the definition of an agent.
Under the Uniform Securities Act, an agent registered in one state may transact business in another state in which he is not registered with which of the following? I.An existing client visiting the state for a 2-week period II.An existing client who moved to the state 6 months ago III.An existing client who moved to the state less than 30 days prior IV.An acquaintance from another state who requests that the agent execute transactions on his behalf
I and III An agent may conduct business in a state in which he is not registered if an existing client is visiting in that state or if the client has moved to the state within the past 30 days.
Under the Uniform Securities Act, there are certain cases when a person in the business of effecting securities transactions for itself or its clients is not considered to be a broker-dealer in the state. In order for this exception to exist, all of the following conditions must be present EXCEPT I.the person must not deal with any employee benefit plans with assets of not less than $1 million II.the person must limit its business activities to other broker-dealers and financial institutions III.the person must not have a place of business in the state IV.all employees must be licensed as agents with the Administrator in at least one state
I and IV It is critical to catch the EXCEPT in this question. We are looking for statements that are not true. If the employee benefit plans they deal with have assets of less than $1 million, the exception does not apply. And, there is nothing in the USA that requires a broker-dealer to register every employee, only those that are involved somehow in the sale of securities.
An investment adviser representative may perform which of the following functions? I.solicit for advisory business II.manage advisory accounts III.earn commissions on sales of recommended securities IV.supervise those who render advice
I, II and IV NOT I, II, III, and IV An IAR may NOT earn commissions on the sale of securities UNLESS also registered as an agent. All of the other activities listed are permitted. Remember, unlike FINRA, there is no principal category of registration. In other words, there is no such thing as an investment adviser principal.
Under SEC Release IA-1092, the term investment adviser does NOT include which of the following? I.A broker-dealer who charges for investment advice II.A publisher of a financial newspaper with regular and general circulation III.A person who sells security analysis IV.A CPA who, as an incidental part of his practice, suggests tax-sheltered investments to wealthier clients
II and IV A publisher of a financial newspaper and a CPA who, as an incidental part of his practice, suggests tax-sheltered investments to high tax bracket clients are not investment advisers. CPA = Certified Public Accountant
Which of the following would be required to register as an agent under the Uniform Securities Act? I.An officer of a broker-dealer who does not deal with customers or supervision of sales II.A director of a broker-dealer who is not involved in day-to-day operations III.A trader who is authorized to handle customer orders IV.An individual who makes cold calls to pre-qualify prospects and lets a principal in the firm handle all customer trades
III and IV An agent is an individual who represents a broker-dealer or issuer in effecting or attempting to effect purchases or sales of securities. Pre-qualifying clients requires registration. Officers and directors are not agents if they are not involved in the transactions of securities with the public. Under the USA, even though the term "principal" may be used to refer to a supervisory person, there is no separate registration category for these people. They are licensed as agents, just like you.
A broker-dealer with no place of business in the state would not be required to register with the Administrator unless one of its clients was
an employee benefit plan with assets of less than $1 million As defined in the Uniform Securities Act, "Broker-dealer" does not include a person who has no place of business in this state if he effects transactions in this state exclusively with or through the issuers of the securities involved in the transactions, other broker-dealers, or banks, savings institutions, trust companies, insurance companies, investment companies as defined in the Investment Company Act of 1940, employee benefit plans with assets of at least $1 million, or other financial institutions or institutional buyers.
Under the Uniform Securities Act, an individual representing an issuer in the sale of its securities to the general public is defined as an agent if the issuer is
an insurance company authorized to do business in the state Agents represent broker-dealers or issuers. However, an individual representing an issuer in the sale of certain exempt securities or in an exempt transaction is not an agent. Even when authorized to do business in the state, an insurance company is not one of the exempt issuers qualifying for the exemption from agent's registration for those who selling the company's securities while representing the company. Banks and trust companies, yes, but not insurance companies. Please see the list in your LEM.
An agent lives in Montana and is registered in Montana and Idaho. His broker-dealer is registered in every state west of the Mississippi River. The agent's client, who lives in Montana, decides to enroll in a 1-year resident MBA program in Philadelphia, Pennsylvania. During the 1-year period, when the client is in Philadelphia, the agent may
conduct business with the client as usual Even though the college program is referred to as a resident program, that does not mean that the client has changed his state of residence. Although neither the firm nor the agent is registered in Pennsylvania, the agent may continue to conduct business with the client. This is because both the agent and his firm are properly registered in the client's state of permanent residence.
A woman wants to buy from an agent who is not registered in her state. She decides to use a friend's address in the state in which the agent is licensed. This action is
not acceptable because there are no circumstances under which you are permitted to use someone else's address as yours This should be obvious. The new account form must always include your residence address.
An employee of a commercial bank selling the bank's bonds to its banking clients is acting in the capacity of a(n)
person excluded from the definition of an agent Commercial banks are included in that group of issuers of exempt securities whose individuals representing them in the sale of their securities are excluded from the definition of agent.
According to the USA, a person must register as a broker-dealer in a state if he had which of the following? I.No place of business in the state, but clients who relocated their official residence to that state more than 30 days ago II.No place of business in the state but dealt exclusively with broker-dealers in that state III.No place of business in the state but effected transactions exclusively with issuers of securities in that state IV.A place of business in the state
I and IV The term "broker-dealer" excludes a person who has no place of business in the state, who effects transactions exclusively through issuers, other broker-dealers or institutions, or who directs an offer in the state to an existing customer. When clients move from one state to another, the broker-dealer may continue to do business with that client without registering in that state for up to 30 days. Once the client has been a new resident for more than 30 days, the broker-dealer (and any agents handling that account) must register in that state or cease doing business with that customer.
Under the Uniform Securities Act, the definition of an investment adviser does NOT include I.investment adviser representatives II.lawyers and accountants whose investment advisory services are solely incidental to their practices III.broker-dealers who offer investment advice on an incidental basis without special compensation for the advice provided IV.federal covered investment advisers
I, II, III, and IV None of the above are included in the term "investment adviser" as used in the Uniform Securities Act. Federal covered advisers are regulated by the Securities Exchange Commission (SEC). The National Securities Markets Improvement Act of 1996 (NSMIA) prohibits dual registration of investment advisers by federal and state authorities. If federal covered advisers were defined as investment advisers under the USA, then they would be subject to the same state registration procedures as local or state investment advisers.
To sell securities, an agent must be registered as an agent in I.his state of residence where he sells securities II.each state in which he actually sells securities III.every state where his employing broker-dealer is registered IV.each state where he offers the sale of securities to retail clients
I, II, and IV Agents must be registered in each state where they are selling or offering to sell securities but not registered in every state where the employing broker-dealer is registered.
Records that must be kept by a broker-dealer include all of the following EXCEPT
customer tax returns NOT a blotter 1.a sheet or pad of blotting paper inserted into a frame and kept on a desk. 2.a temporary recording book, especially a police charge sheet. It is not required that any securities professional maintain copies of customer's tax returns.
Any individual who represents an issuer in effecting transactions between the underwriter and the issuer
does not meet the definition of "agent" as promulgated under the Uniform Securities Act Under the Uniform Securities Act, a person representing an issuer in securities transactions between an underwriter and an issuer is not deemed an agent and is exempt from the agent registration requirements of the act.
Broker-dealers, investment advisers, and agents must renew their licenses with the state Administrator
every December 31, unless otherwise specified by state law Under the Uniform Securities Act, registrations must be renewed every December 31. Registrations are not permanent and can be denied, revoked, or canceled according to the terms of the act.
Under the Uniform Securities Act, the registration requirements for agents would never include
minimum capital DOES INCLUDE: surety bonding, an examination and a consent to service of process form Minimum capital may be required of broker-dealers and investment advisers but not agents. SURETY BONDS ARE: a bond required for many employees, officers and partners of broker-dealers and investment advisers to protect against acts of misplacement, fraudulent trading and check forgery
Under the Uniform Securities Act, the Administrator may require a broker-dealer to post a surety bond of
An amount not in excess of that set by the SEC The NSMIA states that the Administrator may not require a broker-dealer be bonded in an amount above that set by the SEC. Furthermore, bonds will not be required of broker-dealers that maintain a specified net capital.
Foster Advisers, based in New Jersey, manages $135 million in funds for New Jersey-based clients. As a result of the Dodd-Frank Wall Street Reform and Consumer Protection Act, which of the following statements best describes the registration requirement for Foster Advisers?
Foster Advisers is required to register as an adviser with the SEC and notify the Administrator of the New Jersey Department of Securities of its operation. Since the enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act, investment advisers with $110 million or more in assets under management must register with the SEC. These advisers are called federal covered advisers. Investment managers who manage less than $100 million must register with the state Administrator. Advisers with at least $100 million but less than $110 million of assets under management have the option to register with either their state Administrator or with the SEC. Once the $110 million level is reached, registration with the SEC is mandatory. With $135 million under management, Foster Advisers must register with the SEC. Foster Advisers is subject to the additional requirement of notifying the administrators of the securities departments of states in which it maintains offices or clients of its operations. At the state level, a notification fee (but not registration) is generally required. One aim of the NSMIA was to eliminate dual registration of investment advisers with the states and the SEC. Investment advisers are not required to register at both state and federal levels.
An investment adviser is registered in New Jersey and has offices in Georgia and Arkansas. One of their IARs lives in Georgia and in addition to his local clients, has one client who lives in Arkansas. The IAR would be required to register in
Georgia NOT Georgia and Arkansas The IAR is living in Georgia and has local clients so must be registered there. With only one client in Arkansas, the de minimis exemption would apply to the IAR. There is no need to register in New Jersey because the IAR has no clients there. SO DE MINIMIS EXCEPTION CONCERNS THE NUMBER OF CLIENTS (AS OPPOSED TO NUMBER OF RECOMMENDATIONS). THEREFORE, THE DE MINIMUS EXCEPTION IS THAT AN INVESTMENT ADVISER CAN NOT ADVISE MORE THAN 5 CLIENTS IN 12 MONTHS IN A STATE IN WHICH HE IS NOT REGISTERED/HAVE A PLACE OF BUSINESS.
Which of the following are NOT agents as defined in the USA? I.A broker-dealer acting on behalf of a properly registered issuer II.An individual representing the U.S. government in the sale of its securities III.An individual who, acting on behalf of a broker-dealer, sells exempt securities or engages in an exempt transaction IV.An individual who represents an issuer selling a nonexempt security in a nonexempt transaction
I and II A broker-dealer by definition is not an agent. An individual who, while acting on behalf of the issuer, sells certain exempt securities, such as those issued by the U.S. government, is not an agent. The exclusion from the definition of an agent only applies to those individuals who are selling on behalf of the issuer (never a broker-dealer) and only when the transaction is exempt or the issuer is one of a specified list of exempt issuers.
Under the Uniform Securities Act, which of the following is considered a place of business of a registered investment adviser representative? I.An office from which the representative regularly provides advisory services to clients II.A location published in a professional directory, indicated on business cards, or telephone book listing that identifies it as a place where the representative will be available to meet or communicate with clients III.A hotel or auditorium at which the representative has advertised to the public that he will be available to conduct advisory business at that site IV.A hotel meeting room identified only to current clients as a place the representative will be available to conduct advisory business
I, II and III NOT I, II, III, IV The Uniform Securities Act defines a place of business as one where the IAR REGULARLY provides investment advisory services, solicits, meets with, or otherwise communicates with clients, or any other location held out to the public as a location where the representative will do any of these activities. The frequency of use is not a factor. Publicly advertising a hotel location only used once makes it a place of business that year and will probably subject the representative to regulation by the Administrator of the state in which the hotel is located. A hotel room is not included when it is NOT advertised and only used with existing clients, presumably when the adviser is traveling through their state.
The Administrator of State A has just notified Rockland Securities, domiciled in State D, that its application to operate as a broker-dealer in this state is now effective. Which of the following parties would be considered registered in State A? I.The firm II.Agents who are officers III.Agents who are directors IV.Its agents who do business in State A
I, II and III When a business applies for registration as a broker-dealer with a state, its application includes registration information relating to those officers and directors who are already agents in at least one state. As a result, when the broker-dealer's registration becomes effective, those officers and directors are automatically registered as agents in the new state, as well. Individuals employed for the purpose of representing the firm as agents apply for registration on their own separate applications, usually the Form U-4.
Under the Uniform Securities Act, any partner, officer, or director of a registered investment adviser is an investment adviser representative if that individual does which of the following? I.Offers advice concerning securities II.Manages client accounts or portfolios III.Determines securities recommendations for representatives to disseminate IV.Supervises personnel engaged in the above activities but does not sell these services to the public
I, II, III and IV The Uniform Securities Act defines any individuals associated with an investment adviser as investment adviser representatives if they manage accounts or portfolios, determine securities recommendations, or supervise personnel engaged in the above activities, including any partner, officer, or director who offers advice concerning securities. Persons who manage client accounts or portfolios, determine securities recommendations, or supervise personnel engaged in the above activities are investment adviser representatives.
Under the Uniform Securities Act, which of the following statements are TRUE? I.A broker-dealer may not also be registered as an investment adviser. II.A broker-dealer may be structured as a corporation, a partnership, or a sole proprietorship. III.A broker-dealer's primary business is effecting securities transactions for clients or for the broker-dealer's own account. IV.A broker-dealer need not register in a state in which it has non-institutional clients unless it has an office in that state.
II and III A broker-dealer may be structured as a business entity or a sole proprietorship. Its primary business is effecting securities transactions for clients or for its own account. A person may be registered as both a broker-dealer and an investment adviser at the same time. Although a person is not a broker-dealer in this state if there is no office in this state and transactions within this state are limited to issuers, other broker-dealers and institutions if the broker-dealer wishes to offer securities to individuals, it must register in the state.
Which of the following are required to register with a state Administrator?
Investment adviser representatives of federal covered advisers who have a place of business in the state and limit their clientele to employee benefit plans with a minimum of $10 million in assets The investment adviser representatives of a federal covered adviser are required to register in each state in which they have a place of business, even if the only clients are institutions. The act provides a de minimis standard exemption from state registration for advisers who have no place of business in a state and have fewer than 6 retail clients resident in that state. Under state law, the publication of investment advice that does not provide advice based on the specific investment situation of each client excludes the publisher from the definition of an investment adviser. A person employed and supervised by an investment adviser who is not an investment adviser representative with natural person clients and whose work is confined to clerical or administrative functions is not required to register with state Administrators.
Which of the following statements is NOT true regarding the authority of the Administrator under the Uniform Securities Act?
The Administrator may not examine the records of a broker-dealer without seeking a court order from a federal court. The Administrator has inspection power to view all records within or outside the state as is appropriate or necessary in the public interest, without seeking court approval Administrators may require minimum capitalization as a condition of registration. The Uniform Securities Act states that the Administrator may, by rule, provide for an examination, which may be written or oral or both, to be taken by any class of or all applicants. As a practical matter, an oral examination would apply to the business entity (broker-dealer or investment adviser) while written examinations are taken by agents and investment adviser representatives. The Administrator is also given the authority by the act to require the filing of financial reports regarding the net worth of the firm.
If a broker-dealer whose principal office is in Iowa addresses 5 solicitations to potential customers in the nearby Nebraska town of Middleton, and the return address on the mailings is that of the broker-dealer's satellite office in Middleton, which of the following statements is TRUE?
The broker-dealer must register in Iowa and Nebraska. Under the USA, a broker-dealer must register in any state in which it has an office or conducts business with noninstitutional (retail) clients. Soliciting by mail constitutes making an offer in the state. Remember, there is no de minimis rule for broker-dealers. Unlike investment advisers who register with the state or the SEC, never both, SEC registered broker-dealers also must meet state registration requirements. SO IMPORTANT NOTE HERE: INVESTMENT ADVISERS REGISTER WITH THE SEC OR THE STATE, NEVER BOTH
Under the provisions of the Uniform Securities Act, a securities agent may NOT
accept an unsolicited order for an exempt security from a retail client of the broker-dealer who resides in a state in which the agent is not registered In order to accept an order from a retail client who lives in a state, the agent MUST be registered in that state. It makes no difference if the transaction (unsolicited order) or security is exempt, registration as an agent in the state is still required. Agents of broker-dealers may be simultaneously registered with real estate agencies, insurance companies, and with two broker-dealers, provided the broker-dealers are under common ownership or control or the arrangement has been authorized by the Administrator.
The president of a manufacturing company sells his or her company's common stock to the public and receives a commission substantially lower than others selling that stock. Under the USA, the president is acting
as an agent of the issuer Unless the security is in one of the five listed categories of exempt securities, or the transaction is exempt (neither of which apply here), the exclusion from the definition of an agent only applies when the employee of an issuer sells the issuer's securities to employees and does not receive sales related compensation.
The Uniform Securities Act gives the Administrator the power to examine a broker-dealer's business records
at any time, even across state lines There are no limitations on the Administrator's authority to examine a broker-dealer's records other than that the examination be held during normal business hours.
To transact business in a state as an investment adviser representative, a person must
be registered as a representative of an investment adviser and have passed the appropriate NASAA exam for IARs To transact business in a state as an investment adviser representative, a person must be registered as a representative of an investment adviser and have passed either the NASAA Series 65 or Series 66 exam. One is not considered a registered investment adviser representative as a result of passing the Series 6 or 7 registered representative exam, or by virtue of employment with a bank.
An agent registered in one state may solicit business in another state provided
both the agent and the broker-dealer are properly registered in the other state An agent holding registration in one state may solicit and/or transact business in another state only if registered in that state and the employing broker-dealer is also registered in that state, unless an exemption is available.
Under the USA, all of the following are defined as investment adviser representatives EXCEPT the
individual who decides which color paper to use for the IA's brochure According to the Uniform Securities Act, investment adviser representatives include partners, officers, or directors of advisory firms, and any persons employed by the adviser who make recommendations, give advice, manage accounts, service the sale of advisory services, or supervise employees that perform any of these services. Persons that perform clerical or ministerial duties are not related to these services and not defined as investment adviser representatives.
An agent of a broker-dealer registered in Illinois terminates his employment to accept a new position with broker-dealer who is also registered in Illinois. If his previous employer fails to notify the state Administrator of the termination, the agent must
notify the Administrator in Illinois of his termination When an agent begins or terminates a connection with a broker-dealer, the agent as well as the broker-dealer must promptly notify the Administrator. The agent has no responsibility to insure that the previous employer has notified the Administrator.
While your application for registration as an agent is pending, you are permitted to
perform research for registered employees of the firm While your registration as an agent is pending, you cannot perform any of the activities requiring registration. Doing research as described here is solely administrative in nature.
Mary, who is licensed as an agent in State A, got a promotion and will turn her clients over to Julie, who is licensed only in State B. Before Julie can take over the accounts, she must
register with State A For an individual to sell securities in a particular state, she must be licensed in that state unless an exemption applies.
The Uniform Securities Act requires that, under certain conditions, broker-dealers must maintain a surety bond. The amount that must be kept is no higher than the
requirements of the SEC Whether is it bonding, recordkeeping, or net capital requirements, the Administrator can never impose a requirement greater than that of the SEC.
With regard to net capital of broker-dealers, when the Administrator promulgates the minimum requirements for his state, it is mandatory that those requirements do not exceed those of
the SEC Under the NSMIA, Administrators can never insist on financial requirements that exceed those of the SEC.
An individual employed by a federal covered adviser would be required to become registered as an IAR in the state if
the only clients receiving the individual's advice are large pension plans organized for employees of municipalities located in the state where that individual maintains an office Individuals performing the duties of an IAR for a federal covered investment adviser are ONLY required to register in states in which they maintain a place of business. Although pension plans (as long as the total assets of the plan are at least $1 million) are considered institutional investors for exemption purposes, that exemption only applies when the individual has no place of business in the state. NOT REQUIRED TO REGISTER IF: the only clients receiving the individual's advice are banks located in states where the individual does not maintain a place of business the only clients receiving the individual's advice are insurance companies located in states where the individual does not maintain a place of business the only function performed by the individual is preparing the layout of a research report prepared by the firm
