Study Question of the Month – November 2016

Congratulations to Tony P., this month’s Study Question of the Month winner! 

See the answer below!

***Submit your answer to info@solomonexamprep.com to be entered to win a $10 Starbucks gift card.***

Question (Relevant to the Series 63, Series 65, and Series 66)

Nigel is a successful agent of a Canadian broker-dealer in Manitoba. The firm he works for has no offices in the U.S., and he has no interest in moving to the U.S. One of his biggest clients, Beatrice, is in temporary residence in Minnesota settling her mother’s estate. Nigel wants to keep Beatrice as a client but he is not registered in the U.S. and doesn’t know if he can continue to work with Beatrice under the current situation. What is your advice?

A. Nigel needs to bite the bullet and move to the U.S. where he can register in Minnesota and continue to transact business for Beatrice, including possibly reinvesting any proceeds of her mother’s estate.

B. Nigel cannot continue to transact business for Beatrice, since he is not registered in Minnesota and does not want to move to the U.S.

C. Nigel can transact business for Beatrice without problems. Canada and the U.S. have a reciprocity agreement that allows such international business relationships.

D. Nigel can transact business for Beatrice after he obtains a limited registration in Minnesota.

Answer: D. If the Canadian firm does not have offices in the U.S. state (which it does not), and the client is from Canada and is temporarily in that state (which Beatrice is), and had a relationship with the Canadian broker-dealer before entering the state (which Beatrice did), then an agent or broker-dealer may use a limited registration. Nigel has a good many hoops to jump through to get that limited registration, but because Beatrice is a big client, you would advise him to do so.