NASAA Series 63Remedies and Administrative ProvisionsMedium
An Administrator determines that a broker-dealer's registration should be revoked based on violations discovered two years ago. Before revoking the registration, the Administrator generally must:
- AObtain a court order authorizing revocation before taking any action
- BProvide appropriate prior notice, an opportunity for a hearing, and written findings of fact and conclusions of law
- CImmediately revoke the registration without further process, since violations were already confirmed
- DWait until the broker-dealer's registration is due for annual renewal
Show answer & explanationAnswer & explanation
Correct answer: B. Provide appropriate prior notice, an opportunity for a hearing, and written findings of fact and conclusions of law
Except in emergency situations calling for summary action, the Administrator must give notice, provide an opportunity for a hearing, and issue written findings before revoking, suspending, or denying a registration. This due process requirement protects registrants from arbitrary administrative action.
Why the other options are wrong
- A. Court orders are not required for standard administrative revocation actions.
- C. Revocation without notice and hearing violates due process requirements under the Act.
- D. Revocation is not tied to the renewal cycle; it can occur at any time following proper process.
Due Process for Registration Revocation
Before revoking, suspending, or denying a registration, the Administrator must provide notice, an opportunity for a hearing, and written findings, absent an emergency.
- Applies to broker-dealers, agents, IAs, and IARs
- Summary action without prior hearing is reserved for emergencies
- Written findings of fact and conclusions of law are required
Memory trick: Notice, hearing, findings — before the axe falls.