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Series 63 practice questioneasyFederal/State Coordination — State Antifraud Authority

On a timed state-securities quiz, the scenario below appears. Treat the facts as a straight Series 63 application question. Under NSMIA, states retain the authority to:

  1. ARequire full registration of all federal covered securities
  2. BOverride SEC registration decisions for any security
  3. CSet the offering price for federal covered securities
  4. DEnforce antifraud provisions against any security, including federal covered securities✓ Correct answer
Explanation

Why D — Enforce antifraud provisions against any security, including federal covered securities

Under NSMIA and USA Section 101, states retain full antifraud authority over all securities, including federal covered securities. While states cannot require registration of federal covered securities, they can still investigate and bring enforcement actions for fraud. No security or transaction is ever exempt from state antifraud provisions. The governing USA principle is unchanged even though the framing is different.

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