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

Introduction


Related Articles
  1. Mutual Funds & ETFs

    High Dividend ETF: iShares Core High Dividend vs. Vanguard Dividend Appreciation (HDV, VIG)

    Get a comparison review of two high dividend yield ETFs: the iShares Core High Dividend ETF and the Vanguard Dividend Appreciation ETF.
  2. Retirement

    A Guide to Arizona's State Retirement System

    The Arizona State Retirement System offers a defined-benefit plan for former teachers, state workers and public employees.
  3. Mutual Funds & ETFs

    2 Reasons to Be Wary of New ETFs (IFLY, EQLT)

    Pay attention to the number of thematic and smart beta ETFs that may fail to survive as a result of poor performance and thin trading volume.
  4. Forex

    Global Utilities: Exploring Revenue Trends & Fundamentals

    Analyze global revenue exposure in the utilities sector to learn about the impact of currency, regulation and economic growth on geographic contributions.
  5. Home & Auto

    4 Alternatives to a Traditional Mortgage

    If you can't qualify for or don't want a traditional mortgage, one of these options might be right for you.
  6. Home & Auto

    Understanding Mortgage Impound Accounts

    Home buyers with low down payments may get stuck with higher mortgage payments. Find out what you get for the extra money.
  7. Investing

    Municipal Bonds Offer Something More for Everyone

    Are municipal bonds really for me? The popular perception is that tax-exempt income only benefits those investors in the highest tax brackets.
  8. Retirement

    5 Top Alternatives to a Reverse Mortgage

    If you have substantial home equity and don't want to do a reverse mortgage to tap it for retirement expenses, cost out these viable alternatives.
  9. Credit & Loans

    What Is an Alt-A Mortgage?

    Called "liar loans" for their low documentation requirements, Alt-A mortgages were hot until the subprime crisis. Now Wall Street wants to bring them back.
  10. Home & Auto

    Understanding Mortgage-Backed Securities

    Find out the meaning of this popular asset-backed security and its benefits for banks and investors.
RELATED TERMS
  1. Primary Mortgage Market

    The market where borrowers and mortgage originators come together ...
  2. 100% Mortgage

    A mortgage loan in which the borrower receives a loan amount ...
  3. Reverse Mortgage

    A type of mortgage in which a homeowner can borrow money against ...
  4. Mortgage Originator

    An institution or individual that works with a borrower to complete ...
  5. Secondary Mortgage Market

    The market where mortgage loans and servicing rights are bought ...
  6. Mortgage Pool

    A group of mortgages held in trust as collateral for the issuance ...
RELATED FAQS
  1. How safe are money market accounts?

    Learn the difference between a money market account and a money market fund. Both savings vehicles are relatively safe, but ... Read Answer >>
  2. Why is Belize considered a tax haven?

    Explore the factors that make Belize one of the most modern and corporate-friendly tax havens in the world, including its ... Read Answer >>
  3. What is an assumable mortgage?

    The purchase of a home is a very expensive undertaking and usually requires some form of financing to make the purchase possible. ... Read Answer >>
  4. Why would a homebuyer need to take out PMI (private mortgage insurance)?

    Learn why some home buyers are required to take out private mortgage insurance (PMI), and how it affects the total monthly ... Read Answer >>
  5. Why does the majority of my mortgage payment start out as interest and gradually ...

    When you make a mortgage payment, the amount paid is a combination of an interest charge and principal repayment. Over the ... Read Answer >>
  6. What are the disadvantages of a Roth IRA?

    Get informed about Roth IRAs, which have a few disadvantages, including limited access to funds and contribution limits based ... Read Answer >>
Hot Definitions
  1. Hawk

    A policymaker or advisor who is predominantly concerned with interest rates as they relate to fiscal policy. A hawk generally ...
  2. Physical Capital

    Physical capital is one of the three main factors of production in economic theory. It consists of manmade goods that assist ...
  3. Reverse Mortgage

    A type of mortgage in which a homeowner can borrow money against the value of his or her home. No repayment of the mortgage ...
  4. Labor Market

    The labor market refers to the supply and demand for labor, in which employees provide the supply and employers the demand. ...
  5. Demand Curve

    The demand curve is a graphical representation of the relationship between the price of a good or service and the quantity ...
  6. Goldilocks Economy

    An economy that is not so hot that it causes inflation, and not so cold that it causes a recession. This term is used to ...
Trading Center