Series 63 practice questionmediumAdministrator action: notice filing lapses
A mutual fund's notice filing in State C lapses when the renewal fee is not paid. Which is the Administrator's MOST appropriate action?
- AInitiate criminal proceedings against the fund's board
- BSuspend the right to offer the fund's shares in State C✓ Correct answer
- CImpose stricter disclosure requirements retroactively
- DRequire the fund to submit to a merit review of its portfolio
Explanation
Why B — Suspend the right to offer the fund's shares in State C
Failure to maintain a notice filing allows the Administrator to suspend the sale of the fund in the state, but not to change disclosure or require merit review (USA Sec 18(b)). Criminal proceedings are not routine for lapsed filings.
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