A broker-dealer is registered in State A and has no office in State B. It receives an unsolicited order from an existing institutional client located in State B. Under the Uniform Securities Act, the broker-dealer:
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AMust file a notice filing in State B and wait for written approval before processing the order
BIs permanently barred from transacting business in State B without a physical office
CMay rely on a limited exemption available to broker-dealers with no place of business in the state whose clients are institutional buyers or existing customers
DMust immediately register in State B before accepting any order from a State B resident
✓ Correct answer: C. May rely on a limited exemption available to broker-dealers with no place of business in the state whose clients are institutional buyers or existing customersThe USA provides an exemption from broker-dealer registration in a state where the firm has no office if it deals exclusively with institutional investors or with existing customers who are temporarily present in that state, recognizing that requiring full registration in every state would be impractical for such limited contacts.
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