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

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What must a predecessor do to ensure their registration remains effective after a succession?

File an application within 15 days
File a notice of withdrawal from registration
File Form BD within 30 days
Notify all clients about the succession

The correct answer is: File Form BD within 30 days

To ensure that a predecessor's registration remains effective after a succession, the correct action is to file Form BD within 30 days. Form BD is the Uniform Application for Broker-Dealer Registration, which is necessary when there is a change in ownership, control, or business structure of a firm. Filing this form helps to update the information with regulatory authorities and ensures compliance with registration requirements. This process is critical because it confirms to regulators that the successor is continuing the same business and has taken the proper steps to maintain the registration post-succession. It also serves to protect investors by ensuring that the firm’s operations and management remain transparent and within regulatory guidelines. The other options, such as filing an application within 15 days, withdrawing from registration, or notifying clients, do not comprehensively address the regulatory requirement for maintaining registration continuity under a new entity structure.