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← Series 63: Regulation of Securities & Issuers
Series 63 practice questioneasySecurities Registration — Stop Orders

For a mock NASAA exam, assume the administrator is testing this exact point. The key is the registration, exemption, or ethical rule doing the real work. A state Administrator may issue a stop order to:

  1. ASuspend or revoke the effectiveness of a registration statement✓ Correct answer
  2. BPermanently ban an issuer from ever registering securities in the state
  3. CArrest officers of the issuing company
  4. DForce an issuer to register by qualification instead of coordination
Explanation

Why A — Suspend or revoke the effectiveness of a registration statement

Under USA Section 306, a stop order is used by the state Administrator to deny, suspend, or revoke the effectiveness of a securities registration statement. A stop order may be issued if the Administrator finds that the order is in the public interest and the registration statement contains misleading information or the offering would tend to work a fraud. This version tests the same concept with a different fact pattern wrapper.

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