12.2 Securities Registration
It is unlawful for any person to offer or sell any security in a state unless it is registered under the USA, exempt from registration, or a federal covered security.
Key NASAA Exam Takeaways
- Howey Test defines a Security: An investment of money, in a common enterprise, with an expectation of profits, solely from the efforts of others.
- Non-Securities: Term/whole life insurance, fixed annuities, commodities/futures, currencies, collectibles, and personal residences.
- State Registration Methods: Notice Filing (federal covered securities), Coordination (simultaneous SEC and state filing), and Qualification (intrastate offerings).
- Exempt Securities: U.S. Treasuries, municipal debt, Canadian sovereign debt, bank/savings institution debt, commercial paper (<=270 days).
- Exempt Transactions: Isolated non-issuer trades, unsolicited secondary transactions, fiduciary transactions (executor, trustee in bankruptcy), institutional sales.
| Method | Primary Candidates | Effective Date | Key Requirements |
|---|---|---|---|
| Notice Filing | Federal Covered Securities (NYSE/NASDAQ listed, mutual funds) | Upon filing with state / payment of fee | File Form NF, consent to service of process, pay state fee |
| Coordination | Securities registering simultaneously with the SEC under Act of 1933 | Becomes effective simultaneously with federal SEC clearance | Must be on file with state Administrator for 10-20 days |
| Qualification | Intrastate offerings (Rule 147) or securities sold in only 1 state | Effective ONLY when State Administrator orders it | Full disclosure disclosures; 1-year registration validity |
Knowledge Checkpoint • Section 12.2
Which of the following assets is classified as a SECURITY under the Uniform Securities Act?