For a licensing checkpoint quiz, treat the following as the opening fact pattern. Assume all filings and notices are evaluated under the USA. A state enacts a new securities law that requires all issuers, including those offering federal covered securities, to obtain merit-based approval from the state Administrator before selling in the state. Under NSMIA, this state law is:

Why C — Preempted by federal law to the extent it requires registration or merit review of federal covered securities

Under NSMIA, states are preempted from imposing registration or qualification requirements, including merit-based review, on federal covered securities. Any state law that attempts to require merit approval of federal covered securities exceeds the authority preserved to states under NSMIA. States may only require notice filings, fees, and retain antifraud authority. The exam trick is the framing, not the underlying Uniform Securities Act rule.