Series 63 practice questioneasyMutual fund notice filing requirements
A mutual fund registered under the Investment Company Act of 1940 is being offered to investors in State Z. What action, if any, may the State Z Administrator require?
- ARequire a notice filing and payment of a filing fee✓ Correct answer
- BRequire full state registration as a security
- CProhibit the fund's sale unless the issuer submits to a merit review
- DDemand the fund's prospectus be rewritten to comply with state disclosure rules
Explanation
Why A — Require a notice filing and payment of a filing fee
Federal covered securities like mutual funds are exempt from state registration, but Administrators may require notice filings and fees (USA Sec 18(b)(2)-(3)). States cannot require full registration or merit review. Rewriting the prospectus to meet state standards is preempted.
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