Exclusions from the Broker-Dealer Definition
Chapters in this video
- 0:00 Antifraud provisions apply to everyone, even excluded persons
- 1:23 Exclusion versus exemption: the most tested distinction
- 2:04 The five categorical exclusions and the bank holding company trap
- 3:13 No-place-of-business exclusion: the two-step formula
- 3:55 Condition A: institutional-only and the exclusively trap
- 4:45 Condition B: the Snowbird Rule for existing non-resident customers
- 5:15 BD de minimis is zero, not five: the adviser rule never applies
- 6:06 Federal SEC registration never replaces state registration
- 7:21 Rapid-fire exam recap: the physical office kills the exclusion
What this video covers
- Why agents, issuers, banks, savings institutions, and trust companies fall outside the broker-dealer (BD) definition entirely, and why bank holding companies do not
- The distinction between an exclusion (never a BD) and an exemption (a BD relieved from registering), and why the Uniform Securities Act (USA) uses exclusions for this topic
- Why excluded persons remain fully subject to the antifraud provisions despite never needing BD registration
- The two-step formula for the no-place-of-business exclusion: zero in-state office plus either exclusively institutional transactions or an existing customer whose residence is outside that state
- Why the word "exclusively" in Condition A means literally one retail resident client destroys the exclusion, and why pension trusts under Condition A have no minimum asset size
- How the Snowbird Rule works under Condition B: residence outside the no-office state is the test, not vacation length
- Why the BD de minimis exemption is zero (not the investment adviser's five), and why federal Securities and Exchange Commission (SEC) registration never substitutes for state registration
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