All of the following are true about state authority over federal covered securities EXCEPT:

1. AStates may require notice filings and fees from mutual fund issuers
2. BStates may investigate and prosecute fraud in connection with mutual fund sales
3. CStates may require substantive review and approval of mutual fund offerings✓ Correct answer
4. DStates may suspend the ability to sell a mutual fund for noncompliance with notice filing requirements

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