De Minimus Exemption

FINRA FINRA Series 66
1

so the "fewer than 6 " clients really got me. If you are allowed fewer than 6 clients, does it mean you can have 6 clients or 5 clients in one particular state for the registration exemption? I think this is so tricky, like I don’t know how to count. I saw some questions say 5, some say 6. I am a bit confused. Please help to extend or explain.

Thanks.

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Hi! Investment advisers can avoid registration in a state if these two conditions are met:

  • No place of business in the state
  • Maintains 5 or fewer retail clients in a 12-month period

The “5 or fewer” means that they can have {0, 1, 2, 3, 4, 5} clients.

So if an adviser has 6 (or more) clients, they would need to register.

Here’s our chapter on the de minimis rule if you’d like to review it!

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