Lucky the Banker mascotLTB
← Series 63: Regulation of Securities & Issuers
Series 63 practice questionhardAdministrator actions—federal covered mutual funds

A mutual fund registered under the Investment Company Act is late paying its annual notice filing fee in State E, but not in other states. The Administrator issues a stop order for sales in State E. Which is TRUE?

  1. AThe Administrator may stop sales until the fund complies, but cannot impose additional registration requirements.✓ Correct answer
  2. BThe Administrator may revoke the mutual fund's federal registration.
  3. CThe Administrator may require that all prior sales in State E be rescinded.
  4. DThe Administrator may prohibit the sale of mutual funds statewide indefinitely.
Explanation

Why A — The Administrator may stop sales until the fund complies, but cannot impose additional registration requirements.

For federal covered securities, the State E Administrator may halt new sales locally pending compliance (fee/notice), but cannot impose registration or rescind past sales (USA 201). Revocation of federal registration or indefinite bans exceed state authority.

Turn it into reps

Reading one answer is not the same as being ready

Lucky the Banker is a free practice app with 1,051+ Series 63 questions, weak-area tracking, and timed mock exams. No credit card, no paywall.

Practice Series 63 freeSeries 63 exam guide

Spot an error in this question or explanation? Tell us — we fix these fast.

Related Regulation of Securities & Issuers questions