Question

An individual who lived in State B is an existing client of Broker-Dealer. She has temporarily relocated to State A. She contacts her agent located in State B to buy securities. Which statement is TRUE

Answer 1

Answer: c. The Broker-Dealer and the agent must be registered in both States A and B

Step-by-step explanation:

Various States have their own laws on Registration of traders of securities known as Blue Sky laws.

These laws generally provide that trading agents need to be registered in a state in be able to trade securities for a client in that state. Trading Agents in this context refer but are not limited to, Broker-dealers, Agents, Investment Advisers, and Investment Adviser Representatives.

Both the Broker-Dealer and the Agent therefore need to be registered in both states for them to have handled her transactions in the past when she was in State B and in the present when she has relocated to State A.