Series 66

Regulation of Securities - Registration of Securities

Under the Uniform Securities Act, all securities sold in a particular state must be registered in that state, unless they meet one of the following exemptions:

  • Certain issuers - The securities associated with the following issuers are exempt from state registration: government and municipal issuers, issuers regulated under other laws (banks, credit unions, insurance companies, railroads, public utilities), and non-profit organizations such as cooperatives and employer benefit plans.
  • Federal covered security - This includes investment company shares, IPOs and exchange-listed securities.
  • Exempt transactions - These are transactions that do not involve the public, including the following:
  • Fiduciary transactions
  • Unsolicited transactions
  • Real estate transactions secured by a mortgage
  • Isolated non-issuer transactions
  • Transactions between issuers and underwriters
  • Transactions with financial or institutional investors
  • Private placements
  • Sales where no commissions or fees are involved
  • Non-issuer transactions in outstanding securities registered under either the Securities Act of 1934 or the Investment Company Act of 1940

Each of these issues is covered in more detail in the sections below.

Notice Filing
If an issuer deals in federally exempt securities, the person/entity is only required to file the federal forms with the state Administrator. This method is used by established companies who are permitted to use the prospectus filed with the SEC under the Securities Act of 1933 as the filing document for the state. Of course, all fees must be paid.

Notice filing may be referred to on the exam as "registration by filing".

The article "A New Uniform Securities Act" by Richard B. Smith defines notice filing as follows.

"Notice filing under the 2002 Uniform Act is for federal covered securities other than listed securities. This filing consists of a consent to service of process, a filing fee, and (depending on the state securities administrator's requirements) can include copies of material filed with the SEC. The 2002 Uniform Act provides a platform for eventually effectuating one-stop filing, whereby documents filed with the SEC can be electronically filed with states within which offerings are to be made."




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