NASAA Series 63Regulation of Broker-Dealers and AgentsMedium
An agent resigns from Broker-Dealer ABC to join Broker-Dealer XYZ. Under the Uniform Securities Act, who is responsible for promptly notifying the Administrator of the termination of the agent's employment with ABC?
- AOnly the agent must notify the Administrator
- BOnly Broker-Dealer ABC must notify the Administrator
- CNeither party is required to notify; only XYZ must file the new registration
- DBoth the agent and Broker-Dealer ABC must promptly notify the Administrator
Show answer & explanationAnswer & explanation
Correct answer: D. Both the agent and Broker-Dealer ABC must promptly notify the Administrator
The USA requires both the broker-dealer and the agent to promptly notify the Administrator when the employment or association relationship terminates, ensuring accurate and timely registration records.
Why the other options are wrong
- A. The broker-dealer also has an independent notification duty.
- B. The agent also has an independent duty to notify the Administrator.
- C. Termination notice is required regardless of a new firm's registration filing.
Termination Notice Requirement
Both the broker-dealer and the agent must promptly notify the Administrator when the agent's employment or association with that broker-dealer ends.
- Dual notification duty applies to both firm and individual
- 'Promptly' generally means without unreasonable delay
- New firm's registration filing does not substitute for termination notice
Memory trick: Two parties, one goodbye, both must say it.