Investment Company and. Variable Contracts Products Principals (Series 26) Practice Exam

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When does the registration of the predecessor broker or dealer cease to be effective after filing Form BD by the successor?

30 days
15 days
45 days
60 days

The correct answer is: 45 days

The registration of the predecessor broker or dealer ceases to be effective 45 days after the filing of Form BD by the successor. This timeline is significant as it provides a clear structure for the transition of registrations in the financial industry, particularly during mergers and acquisitions or changes in business structure. The 45-day period is designed to allow regulatory authorities adequate time to process the Form BD and ensure compliance with all necessary requirements before the predecessor's registration is officially canceled. It also provides a transitional phase during which both the predecessor and the successor can manage the client accounts and regulatory obligations without disruption. Understanding this timeline is essential for compliance with regulatory standards and effectively managing the registration process during a change in brokerage or dealer entities.