Net capital requirements for broker-dealers in a state follow federal rules and may require surety bonds.

• A. True
• B. False
• C. Only for large firms
• D. They never require bonds

Answer: (A)

Net capital rules are there to ensure broker-dealers have enough liquid cushion to meet customer obligations and avoid insolvency. In practice, states generally adopt or reference the SEC’s federal net capital standard (the requirement under Rule 15c3-1), so the state net capital requirements for broker-dealers align with federal rules. At the same time, many states can impose an additional layer of protection by requiring a surety bond as part of a broker-dealer’s registration or ongoing requirements. This combination means the statement is true: state net capital follows federal rules, and bonds may be required.