Series 63 practice questionmediumFederal Covered Security - Investment Company
If an agent sells shares of an SEC-registered open-end mutual fund to a client in State Z, which of the following statements is TRUE?
- AThe mutual fund shares must be registered by coordination before sale
- BThe agent may sell the shares after a notice filing and payment of fees to State Z✓ Correct answer
- CThe Administrator may require a merit review before sale
- DThe shares are exempt from all state regulation, including antifraud provisions
Explanation
Why B — The agent may sell the shares after a notice filing and payment of fees to State Z
State Administrators may require notice filings and fees for mutual funds, which are federal covered. They may not require state registration or merit review, but antifraud law still applies.
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