Successor Registration

When a broker-dealer reorganizes into a successor firm, its registration:

1. A.May continue under the succession rulesCorrect - succession allows continuity.
2. B.Never transfersThe absolute word never is what gives this away. Succession provisions exist precisely so a reorganized firm is not forced to start registration over in the middle of a period, and continuation is the ordinary result.
3. C.Is automatically voidThis treats a change in corporate form like a withdrawal or a revocation. Registration does not extinguish itself when a firm reorganizes; the successor picks it up through the succession filing rather than watching it lapse.
4. D.Requires arrest of the principalsThis imports a criminal consequence into a routine administrative event. Reorganizing is a lawful corporate act with no misconduct in it, and criminal process under the Act requires a willful violation proved to a criminal standard, which nothing in the stem suggests.

Why: A successor firm's registration may continue (often for the rest of the period) under the succession rules.

A registered broker-dealer partnership reorganizes as a corporation mid-year with the same principals and business. Regarding registration of the successor corporation, the Uniform Securities Act provides that:

1. A.The successor's registration covers the unexpired portion of the year with no additional feeCorrect. Sec. 202(b) carries the registration through year-end without a second fee.
2. B.The successor must wait the full 30 days and pay a new annual feeWrong. The successor provision exists precisely to avoid disrupting a continuing business.
3. C.The predecessor's registration transfers automatically with no filing at allWrong. A successor application must still be filed; only the fee and fresh waiting period are excused.
4. D.All agents of the firm must requalify by examinationWrong. A change of organizational form does not void agent qualifications.

Why: A successor may file a registration application whether or not it is yet organized, and the successor's registration takes effect for the unexpired portion of the predecessor's registration year without an additional fee. Citation: Uniform Securities Act Sec. 202(b). Takeaway: successor = rest of the year, no new fee.

Ostlerbrook Securities has been a registered broker-dealer in State T since 2019. Its owners will reorganize the business on September 1, 2026 into a newly chartered corporation, Ostlerbrook Capital Corp., which has not yet been formed. On July 15, 2026 Ostlerbrook Securities files an application to register the successor. Which statement about that filing is TRUE?

1. A.It is properly filed for a successor not yet in existence, but a full annual filing fee is due because the successor is a new registrantThe timing point is right and the fee point is wrong. The Act states that there shall be no filing fee for a successor application.
2. B.It cannot be filed until Ostlerbrook Capital Corp. legally exists, and a full annual filing fee will then be dueBoth halves are wrong. The Act permits the filing for a successor not yet in existence, and it charges no fee for a successor application.
3. C.It is unnecessary, because a change in the form of organization does not disturb an existing registrationA pure name change would not, but a reorganization into a different legal entity produces a different person, and registrations do not pass automatically between persons.
4. D.It is properly filed even though the successor does not yet exist, it covers only the unexpired portion of the year ending December 31, 2026, and no filing fee is requiredCorrect on all three points. This is the successor-registration mechanism the Act provides for exactly this situation.

Why: The Uniform Securities Act expressly allows a registered broker-dealer or investment adviser to file an application for registration of a successor whether or not the successor is then in existence. The successor's registration covers only the unexpired portion of the year, so it runs to December 31, 2026 and must then be renewed like any other registration. No filing fee accompanies the successor application.