9.7 - Methods of State Registration of Securities
Under the National Securities Markets Improvement Act of 1996 (NSMIA), investment companies
registered under the Investment Company Act of 1940 are required to register:
A) as exempt securities, at neither state nor federal levels.
B) as securities at the federal level only.
C) as securities at the state level only.
D) as securities at both state and federal levels. Correct Answer: Answer: B
The NSMIA requires that the SEC, rather than individual states, assume responsibility for the registration
and regulation of federal registered mutual funds and other investment companies. Thus, these federal
registered investment companies are no longer required to register at the state level; however, they will
likely have to pay state filing fees by going through the notice filing procedure.
In the event that a filing with the state securities Administrator is found to have material misstatements
or omissions, a correcting amendment must be filed:
A) within seven business days of the discovery.
B) with the Administrator and the SEC Fraud Division within five business days of the discovery.
C) with a new consent to service of process.
D) promptly. Correct Answer: Answer: D
If a filing with the Administrator is found to have material misstatements or omissions, an amendment
must be filed promptly with the office of the Administrator.
A closed-end investment company is registered under the Investment Company Act of 1940. Its shares
trade on the Nasdaq Stock Market. To qualify their shares for sale in the state, they would probably use:
, A) supplementation.
B) notice filing.
C) coordination.
D) qualification. Correct Answer: Answer: B
Regardless of where shares of this closed-end investment company trade, like all investment companies
registered under the Investment Company Act of 1940, it is a federal covered security. The company is
basically exempt from state registration and is only required to follow a procedure known as notice
filing.
All of the following statements relating to the USA's provisions dealing with the registration of securities
are correct EXCEPT:
A) the NSMIA preempted the state registration of certain securities known as federal covered securities.
B) notice filings cannot be required of federal covered investment company securities as they are
exempt from the registration requirements of the USA.
C) a corporation registering a new issue with the SEC and wishing to sell in the state may register by
coordination.
D) any registrant may use qualification, even if it has filed a concurrent registration with the SEC. Correct
Answer: Answer: B
The NSMIA did take the registration powers away from the states for certain securities, defined in the
law as federal covered securities. However, the states still have the right to require notice filings in order
to, among other things, determine the appropriate fee to charge the registrant. Coordination is the
usual method when registering with the SEC and the state at the same time. While not the expected
practice, any security may register using qualification, even if it has an SEC registration in process.
When using the process of registration by coordination under the Uniform Securities Act, issuers shall
simultaneously submit to the state, the documents filed with the SEC under the:
Under the National Securities Markets Improvement Act of 1996 (NSMIA), investment companies
registered under the Investment Company Act of 1940 are required to register:
A) as exempt securities, at neither state nor federal levels.
B) as securities at the federal level only.
C) as securities at the state level only.
D) as securities at both state and federal levels. Correct Answer: Answer: B
The NSMIA requires that the SEC, rather than individual states, assume responsibility for the registration
and regulation of federal registered mutual funds and other investment companies. Thus, these federal
registered investment companies are no longer required to register at the state level; however, they will
likely have to pay state filing fees by going through the notice filing procedure.
In the event that a filing with the state securities Administrator is found to have material misstatements
or omissions, a correcting amendment must be filed:
A) within seven business days of the discovery.
B) with the Administrator and the SEC Fraud Division within five business days of the discovery.
C) with a new consent to service of process.
D) promptly. Correct Answer: Answer: D
If a filing with the Administrator is found to have material misstatements or omissions, an amendment
must be filed promptly with the office of the Administrator.
A closed-end investment company is registered under the Investment Company Act of 1940. Its shares
trade on the Nasdaq Stock Market. To qualify their shares for sale in the state, they would probably use:
, A) supplementation.
B) notice filing.
C) coordination.
D) qualification. Correct Answer: Answer: B
Regardless of where shares of this closed-end investment company trade, like all investment companies
registered under the Investment Company Act of 1940, it is a federal covered security. The company is
basically exempt from state registration and is only required to follow a procedure known as notice
filing.
All of the following statements relating to the USA's provisions dealing with the registration of securities
are correct EXCEPT:
A) the NSMIA preempted the state registration of certain securities known as federal covered securities.
B) notice filings cannot be required of federal covered investment company securities as they are
exempt from the registration requirements of the USA.
C) a corporation registering a new issue with the SEC and wishing to sell in the state may register by
coordination.
D) any registrant may use qualification, even if it has filed a concurrent registration with the SEC. Correct
Answer: Answer: B
The NSMIA did take the registration powers away from the states for certain securities, defined in the
law as federal covered securities. However, the states still have the right to require notice filings in order
to, among other things, determine the appropriate fee to charge the registrant. Coordination is the
usual method when registering with the SEC and the state at the same time. While not the expected
practice, any security may register using qualification, even if it has an SEC registration in process.
When using the process of registration by coordination under the Uniform Securities Act, issuers shall
simultaneously submit to the state, the documents filed with the SEC under the:
