Series 63 practice questionhardHard: Delisting and Effect on Federal Coverage
If a security is delisted from the NYSE and no longer listed on any national securities exchange, what is the likely effect under the USA?
- AThe security remains a federal covered security indefinitely
- BThe security immediately loses federal covered status and may require state registration✓ Correct answer
- CThe security becomes exempt under state law automatically
- DThe security must be registered with the SEC again
Explanation
Why B — The security immediately loses federal covered status and may require state registration
Federal covered status for exchange-listed securities depends on being listed or authorized for listing. Once delisted from all exchanges, state registration may be required unless another exemption applies.
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