During a compliance drill, focus on how the Uniform Securities Act applies here. The key is the registration, exemption, or ethical rule doing the real work. When a conflict exists between a state blue sky law and a federal securities law regarding the registration of a federal covered security, which law prevails?

Why D — Federal law prevails under the Supremacy Clause; the state cannot require registration of federal covered securities

Under NSMIA and the Supremacy Clause of the U.S. Constitution, federal law preempts state law regarding the registration of federal covered securities. States cannot impose registration requirements on federal covered securities, though they may require notice filings and fees, and they retain full antifraud authority. This variant keeps the same legal rule but shifts the setup so recall has to stay flexible.