Series 63 practice questionhardAdministrative Procedures — Federal Law Preemption
A state Administrator adopts a rule that directly conflicts with a provision of the Securities Act of 1933. Which of the following is TRUE?
- AThe state rule prevails because state securities laws always supersede federal laws
- BThe Administrator's rule is invalid because state rules may not conflict with applicable federal law✓ Correct answer
- CBoth rules apply simultaneously and registrants must comply with both
- DThe conflicting rule is valid until challenged in federal court
Explanation
Why B — The Administrator's rule is invalid because state rules may not conflict with applicable federal law
Under USA Section 415, the Administrator may make rules and orders necessary to carry out the provisions of the act, but these rules cannot conflict with applicable federal securities law. Federal preemption under the Supremacy Clause means that conflicting state rules are invalid.
Turn it into reps
Reading one answer is not the same as being ready
Lucky the Banker is a free practice app with 646+ Series 63 questions, weak-area tracking, and timed mock exams. No credit card, no paywall.
Related Remedies & Administrative Provisions questions
- Under what circumstances may the Administrator issue a summary order suspending a registration without a prior hearing?
- The Uniform Securities Act encourages cooperation between state Administrators by allowing them to:
- An investment adviser receives notice that the Administrator intends to revoke its registration. The adviser requests a…
- The Administrator may require registered broker-dealers and investment advisers to: