Blue Sky laws
Laws passed by individual states to protect investors against securities fraud. Requires sellers of new stock issues or mutual funds to register their offerings and provide financial detail.
State Authority over Federal Covered Securities
A State Administrator cannot require the registration of federal covered securities in the state. Federal covered securities include any of the securities listed below:
- Exchange Listed Securities -This refers to any security listed on the New York Stock Exchange, American Stock Exchange or Nasdaq, as well as senior securities (such as preferred stocks and bonds of a company whose stock is so listed).
- Investment Company Shares -This refers to mutual fund shares issued by a registered investment company and sold to qualified purchasers (an individual with at least $5,000,000 in investments or investment managers with at least $25,000,000 in assets under management).
Initial Public Offering - A state Administrator cannot require registration of IPOs, but they can require a notice filing in the state and a payment of a filing fee.
Some IAs must register with the st
- Engaging in the business of advising others, either directly or indirectly (such as via a newsletter), as to the value of securities or the advisability of investing in securities; OR
- Issuing analyses or reports on a regular basis as part of a business; OR
- Providing investment advisory services to others in a financial planning practice.
An IA must register in every state where he or she does business with clients, whether or not he/she actually maintains a place of business in the state. The only exemption is for advisors with no place of business in a state who:
- Only deal with institutional investors; OR
- Have five or less clients in that state.
If an existing client is temporarily visiting another state, the IA is not subject to registration requirements in the second state.
Regulation of insurance companies, brokers and agents is handled by individual states. Many states adopt regulations and laws developed by the National Association of Insurance Commissioners (NAIC).
- Licensing - Insurance agents who sell insurance products generally must obtain a license from their home state. Includes financial planners who sell insurance products.
- Licensing of financial planners - In some states, financial planners who make generic recommendations about insurance coverage for a client may be subject to state registration or licensing.
Business Law: Contracts
Retirement"Do as I say and not as I do" doesn't make for a great professional reputation.
Personal FinanceUnder ACA, is health care insurance something you can take with you state to state?
ProfessionalsSeries 63 is a securities license that entitles the holder to sell securities in a particular state.
InvestingLearn what you need to know about the state securities administrator to pass the Series 63 exam.
Financial AdvisorDiscover the general job duties and average salary of a financial planner, as well as the education, training and skills necessary for success.
RetirementDon’t be lured into a false sense of security with advisors because of the new DoL ruling. Due diligence is still a must when it comes to fee disclosures.
ProfessionalsMost states require individuals to pass the Series 65 exam in order to act as investment advisors.
InvestingLearn what you need to know about the creation and components of a mutual funds to pass the Series 6 exam.
TradingThe Great Recession may have ended, but broker wrongdoing hasn't. Here's how to make sure you don't get stuck with the next Bernie Madoff.
Financial AdvisorClients love planners who sell securities, but a securities license takes a lot of work. Learn if the stress and study are worth it.