Series 63 practice questionmediumSecurities Registration — Notification/Filing
An issuer registering securities by notification must meet several requirements. Which of the following would DISQUALIFY an issuer from using this method?
- AThe issuer has been subject to a stop order or injunction within the past five years involving the registration or sale of securities✓ Correct answer
- BThe issuer has paid dividends in each of the last three fiscal years
- CThe issuer is listed on a national securities exchange
- DThe issuer's securities are being underwritten on a firm commitment basis
Explanation
Why A — The issuer has been subject to a stop order or injunction within the past five years involving the registration or sale of securities
Under USA Section 302, registration by notification is reserved for issuers with a clean regulatory record and proven financial stability. An issuer that has been subject to a stop order or injunction regarding the registration or sale of securities within the past five years would be disqualified, as this indicates regulatory concerns about the issuer's past conduct.
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