Series 63 practice questionmediumCovered securities—private placements
All of the following describe proper state Administrator actions regarding a Rule 506 Regulation D private placement EXCEPT:
- ARequire notice filing (Form D) and payment of a fee.
- BInitiate enforcement for fraudulent statements in the offering.
- CImpose additional state suitability standards on accredited investors.✓ Correct answer
- DInvestigate misleading sales practices by agents.
Explanation
Why C — Impose additional state suitability standards on accredited investors.
NSMIA preempts states from imposing additional substantive conditions (like extra suitability) on federal covered private placements. Notice filings, antifraud enforcement, and investigating sales practices are allowed.
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