Exclusions from the Broker-Dealer Definition

What this video covers

• Why the Uniform Securities Act (USA) uses exclusions from the BD definition rather than exemptions, and what that means for legal reasoning
• The animal rule: how exclusion means you were never a BD, while exemption means you are a BD with a VIP pass from registering
• Why antifraud provisions apply to everyone, including excluded entities, and why exclusion is not a shield from fraud liability
• Which entities are excluded from the BD definition: agents, issuers, banks, savings institutions, and trust companies
• The bank holding company trap: why a bank is excluded but its holding company is not, and when registration becomes mandatory
• The two-element recipe for the no-place-of-business exclusion, including the institutional-only condition and the snowbird or vacation rule
• Why broker-dealers have zero de minimis allowance (unlike investment advisers with five clients), and how one retail prospect destroys the exclusion entirely
• Why Securities and Exchange Commission (SEC) registration does not preempt, satisfy, or substitute for state registration, with the single exception of maximum net capital requirements