Series 63 practice questionhardCovered security removal and state authority
A security previously listed on the NASDAQ, and therefore a federal covered security, is delisted and now trades OTC. What can State D’s Administrator require if the issuer continues sales in the state?
- ARequire full registration of the security under state law✓ Correct answer
- BContinue only with notice filing requirements
- CImpose no requirements, as it remains a federal covered security
- DLimit the sales to institutional investors only
Explanation
Why A — Require full registration of the security under state law
When a security loses federal covered status (e.g. no longer exchange-listed), it is subject to state registration (USA Sec 18(b)). Notice filings are only for covered securities. The Administrator may require registration, not just limit to institutions.
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.
Spot an error in this question or explanation? Tell us — we fix these fast.
Related Regulation of Broker-Dealers & Agents questions
- An agent in State E tells a client that a mutual fund is 'registered in State E,' implying state review of the fund’s…
- If an Administrator suspects fraud by a mutual fund issuer, which of the following actions is LEAST likely to occur?
- All of the following are true about state authority over federal covered securities EXCEPT:
- A mutual fund's notice filing in State C lapses when the renewal fee is not paid. Which is the Administrator's MOST…
- An agent at a broker-dealer executes frequent transactions in a retired client's account, claiming it is to take…
- Which statement BEST describes the distinction between a state notice filing and state registration of a mutual fund…
- An individual who represents an issuer in a transaction involving which of the following securities would NOT need to…
- A mutual fund seeking to offer shares in State B submits its SEC prospectus and pays the required notice filing fee.…