The Foundation - The Administrator
North American Securities Administrators Association (NASAA)
As the name indicates, NASAA is an organization of securities Administrators. The term "Administrator" is a generic title used to indicate the person who is responsible for enforcing the Uniform Securities Act in a state. In various states this person is called "commissioner," "director," or "secretary of state for securities."
NASAA, as an organization, actually predates the major Federal securities laws such as the Securities Act of 1933 and the Securities and Exchange Act of 1934. It was formed in Kansas in 1916 and made its first efforts at standardizing the securities laws of the states shortly thereafter. The organization's goals were to protect the public by drafting model laws, which could be adopted by the individual states to prevent fraud and register the persons involved in the securities business. A Kansas Supreme Court Justice, in the early days of securities regulation, was quoted as saying that people were coming into his state and selling schemes that had no more substance than "so many feet of blue sky." The Uniform Securities Act has, as a result, been popularly known as the "Blue Sky" law.
NASAA is still closely focused on the protection of the general public against fraud in the securities business. The Uniform Securities Act (USA), as a set of laws adopted by states, is far more oriented toward the protection of the average investor than the protection of institutions. This is a concept that you should keep in mind as you study for the exam. Transactions by and with institutions are frequently exempt from the provisions of the Act.
The first version of the Uniform Securities Act, which gained broad acceptance by the states, was drafted by the Uniform Law Commissioners in 1956. This version of the law, as noted above, still forms the foundation for most of the uniform laws and, most importantly for candidates, for the Series 63 exam. It is a template of uniform securities laws that states use to form laws of their own that are suitable for the individual states' needs. The 1956 law still firms the foundation for state regulation is an important concept for the Series 63. It also explains why some of the dollar figures are so low by today's standards!
A revision of the Law was written in 1985 and revised again in 1988, but was enacted in only a handful of states. In 2002, the Uniform Law Commissioners finalized the draft of a new Uniform Securities Act to bring the state laws in line with Federal legislation that had been passed in recent years. To date, the acceptance of the new law by the states is not widespread. The Policy Statements, Memoranda of Understanding and Model Rules of NASAA have been published to assist in bringing state securities laws based on the 1956 Act into harmony with federal securities laws passed in recent years.
Exam Tips and Tricks
A hint on answering questions on the exam: If a question begins with the words "The administrator may", the answer may include all the choices. The administrator is granted broad powers to fulfill the requirements of his/her office. Conversely, if the question begins with the words, "The administrator must", there are far fewer choices. Again, the USA provides administrators with very broad powers.
series 63 sample questions Securities Institute
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