Kinda confused at this question, I think I understand it now, but would like an explanation.
Thanks!
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Hi @chrissstevens - sorry for the delay in responding!
For this specific NASAA rule, a state-registered adviser must follow a specific protocol when falling below minimum net worth requirements. In particular, two things must be done once the net worth deficiency has been identified:
- Notification made to the administrator the business day after
- File a financial report with the administrator the following business day
Let’s go through each answer to determine why it’s right or wrong:
A) If falling below the minimum on Friday, a notice must be sent to the administrator by the following Tuesday
This answer is incorrect because the notice must be filed the following business day, which is Monday.
B) If falling below the minimum on Thursday, a report must be filed with the administrator by the following Monday
This answer is correct because the financial report must be filed two business days after, which is Monday.
C) If falling below the minimum on Monday, a report must be filed with the administrator by the Tuesday
This answer is incorrect because the financial report must be filed two business days after, which is Wednesday.
D) If falling below the minimum on Wednesday, a notice must be sent to the administrator by the following Friday
This answer is incorrect because the notice must be filed the following business day, which would be Thursday.
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