Series 63 practice questionmediumUSA vs. Federal Law: Preemption
A company offers shares through a Rule 506 Regulation D private placement. What is the state’s authority regarding this offering?
- AStates may require a notice filing and fees but cannot require registration✓ Correct answer
- BStates may require full merit registration
- CStates can approve or deny the offering’s advertising materials
- DStates have no authority over any aspect of the offering
Explanation
Why A — States may require a notice filing and fees but cannot require registration
Rule 506 offerings are covered securities under NSMIA; states may require a notice filing and fee but cannot require registration (USA Section 18(b)(4)(E)). States cannot require merit review (B), advertising approval (C), or ignore antifraud enforcement (D).
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