State securities Administrators can have jurisdiction over your sales offer in two states even when you never leave your office. An Administrator may also investigate someone who has never held a securities registration.
When your firm files an application or receives a regulatory request, you need to identify who has authority to act. The state securities Administrator is the state agency or official responsible for administering the state's securities law under §406(a). Your firm is a broker-dealer, and you act as its agent when representing it in securities transactions.
For this exam, assess the Administrator's authority under the 1956 Uniform Securities Act, as amended. It is model legislation; each state enacts its own law. References to the Act below use that tested model.
Under §412(a), the Administrator may make, amend, or rescind rules, forms, and orders to carry out the Act. Amend means change; rescind means withdraw. Rules set generally applicable requirements, forms organize required submissions, and orders address particular persons. These tools let the Administrator put the statute into practice.
Common mistakes
- Treating 6,000 outside copies out of 9,000 as enough. Exactly two-thirds misses §414(e)'s strict threshold for a publication published inside the state.
- Choosing only the customer's state. An offer originating in Alder and directed and received in Birch can connect both states.
- Giving the Administrator the court's contempt role. Under §407(c), the court handles disobedience of its enforcement order.
Bottom line
- The Administrator may make, amend, or rescind rules, forms, and orders consistently with the Act; rules and forms must be published.
- Seller and buyer territorial tests differ, and offers can be made in multiple states.
- Acceptance requires reasonable direction, receipt, and no prior communication to the offeror outside the state.
- A qualifying publication published locally needs more than two-thirds outside circulation during the preceding 12 months for that exception.
Exam shortcut
For a location question, circle “buyer” or “seller” before tracing communications. Mark origin and directed receipt, then add acceptance only if that route requires it. For acceptance, search for an earlier phone call or message before relying on a later confirmation. For publication figures, calculate the exact two-thirds boundary and reject equality. Check publication location before calculating.
The full lesson (about 3,128 words, 21 min read) adds 2 worked examples, all 6 common mistakes, a self-check, free in the app.
Learning objectives
- F11
Browse all free Series 63 lessons or jump into free Series 63 practice questions.