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Feb 9, 2006 2:56 pm

My firm is a small firm that basically only solicits business in 2 Mid-west states.  As clients have moved across the country we haven’t increased our registration to all of the states.  Today we get a notice from Vermont that we were supposed to be registered because we have a single client in the state.  They became clients in 1977 and moved to Vermont in 1994.  Do we need to register the firm and the broker in Vermont over a single client?

I remember reading that each firm is allowed something like 5 clients in states for this type of purpose without registration in that state as long as you don’t solicit new clients in that state.  Is this all true?

We are registered as a broker/dealer.

Feb 9, 2006 4:29 pm

I believe states have differing requirements/exemptions for state registration.  Your registrations department should check with each applicable state securities commissioner.

Feb 9, 2006 5:10 pm

I called Vermont and they require registration for a single client.  It’s a shame.  The client is 92 years old and in a nursing home and we hold about $300,000 in individual bonds her husband had purchased.  We’ll just issue certs to the client and be done with it.  It’s a shame but we were holding the account just as a favor for her and I’m not swallowing the fees and spending the time for registration for a favor to her dead husband.  My total fee with salaries would be well over $1,500 to keep a client that hasn’t generated a commission in 10+ years.

States need to take this stuff into consideration.  Pathetic.  She’s been a client of the firm for 39 years and moved to Vermont to be near her child.