Broker-Dealers

Question 1

Who is a broker-dealer?

Answer 1

A person or firm trading for themselves and for the accounts of others

Question 2

Who is/are specifically excluded from the definition of a BD?

Answer 2

• Agents
• Issuers of securities
• Banks
• Savings institutions
• Trust companies

Question 3

How does BD get discretionary account authorization?

Answer 3

In writing, received before the initial discretionary trade

Question 4

What are the financial requirements for BDs?

Answer 4

As required by Administrator but never more than the SEC maximum

Question 5

Who is/are specifically excluded from the definition of a BD based on having no office in this state?

Answer 5

Effects transactions in this state exclusively with
* other BDs
* issuers of the securities being traded
* clients covered by snowbird exemptions
* financial institutions
==>
banks,
savings institutions,
trust companies,
insurance companies,
investment companies,
pension or profit-sharing trusts having assets >= $1 million

Note: IAs excluded from list

Question 6

Is a person with no office in the state who effects securities transactions with individual residents of the state always considered a BD?

Answer 6

Yes