Exercise
Choose State A, State B, or both.
1. _____John works for a broker-dealer. He has an office in State A. He has no office in State B, and he has 5 institutional clients and 2 retail clients there. In which state or states should he be registered?
2. _____Steve, who has an office in State A, has a client named Brenda. He has worked with Brenda for five years, and she is currently on vacation in State B when Steve effects a transaction for her. In which state or states should Steve be registered?
3. _____Quinne is an agent with an office in State A, where she sells only exempt Treasury securities. She also has 10 institutional investors in State B. In which state or states should Quinne be registered?
Answers
1. Both. Since John has an office in State A, he must register there. He doesn’t have an office in State B; however, he does have retail clients there. Whenever an agent who works for a broker-dealer has retail clients in a state, he must register there. That means John must also register in State B.
2. State A. Since Steve has an office in State A, he must register there. However, since Brenda is only on vacation in State B, Steve does not need to be registered there to effect transactions for her.
3. State A. Since Quinne has an office in State A and sells exempt securities, which are different from non-securities investments, she must register there. However, since her only clients in State B are institutional investors, she does not need to register in that state.
7.10.4.1.2. Agents Representing Issuers
Agents representing issuers do not have to register with the state if:
• They only engage in transactions in certain exempt securities. If an