Question

A broker/dealer has agents who work with individual investors in California. The broker/dealer and all of the agents are located in Arizona. Which of the following registrations are required in this scenario?
Because the broker/dealer is not located in California, it does not need to register in California.
Because the broker/dealer does business with individuals in California, it must be registered in California.
Because the agents are not located in California, the agents do not need to register in California.
Because the agents do business with individuals in California, the agents must be registered in California.

[A] I and III only
[B] I and IV only
[C] II and III only
[D] II and IV only

Answer 1

Answer:

[D] II and IV only

Because the broker/dealer does business with individuals in California, it must be registered in California.

Because the agents do business with individuals in California, the agents must be registered in California.

Explanation:

The brokers or dealer's must register where they have offices and where the do business. Even in states where they do not have offices they are required to register.

So in this case although all the brokers and agents are located in Arizona, if they want to conduct business the must be registered in California.

The business dealings are with individuals so these guidelines must be followed. However if the client is a firm they can be exempted.