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Unit 4: Regulation of Securities and Issuers

Terms in this set (129)

Broker-dealers with no place of business in the state, dealing exclusively with other broker-dealers or institutional clients, are not considered to be a BD in the state (as long as they are properly registered in at least ___ state- the location of their principal office). Let's apply that to the following situation:
ABC Securities is a BD registered in State A. They have no place of business in State B, but they do effect transactions on behalf of a number of banks and insurance companies located in State B. Therefore, they are not considered BDs in State B and are exempt from registering. Should ABC Securities sell some government securities to these clients, neither ABC nor the agents making the sale are required to be registered. This is not because the government securities are ___ (that just means the securities don't have to register with the Administrator), but because, under the USA, ABC does not meet the definition of a broker-dealer in State B, it does not have to register.
However, should ABC decide to have any of their agents sell these government bonds to individual (sometimes referred to as ___) clients in State B, then even though the bonds are exempt securities both ABC and the selling agents must register in that state.
The same applies to exempt transactions. One of the most common cases is when a client calls an agent to purchase a security that is not exempt and not registered in your state. But, because the transaction has been ___ by the client, as an unsolicited trade, it is an exempt transaction and, therefore, the trade may be made even though the security is not registered.