Series 63 practice questionmediumFederal/State Coordination — Blue Sky Laws vs Federal
When a conflict exists between a state blue sky law and a federal securities law regarding the registration of a federal covered security, which law prevails?
- AThe state law always prevails under the 10th Amendment
- BThe SEC and the state Administrator must negotiate a resolution
- CThe issuer may choose which law to follow
- DFederal law prevails under the Supremacy Clause; the state cannot require registration of federal covered securities✓ Correct answer
Explanation
Why D — Federal law prevails under the Supremacy Clause; the state cannot require registration of federal covered securities
Under NSMIA and the Supremacy Clause of the U.S. Constitution, federal law preempts state law regarding the registration of federal covered securities. States cannot impose registration requirements on federal covered securities, though they may require notice filings and fees, and they retain full antifraud authority.
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