Uniform Securities Act & Registration
Series 65 Section IV: who must register and who is excluded or exempt, how securities are registered, and what the state Administrator can and cannot do.
32 terms in this unit.
Uniform Securities Act (USA)
The model state securities law most states' 'blue sky' statutes are based on.
State Securities Administrator
The official or agency that enforces a state's securities act.
Person (USA Definition)
Anyone who can be held legally responsible - individuals and organizations.
Investment Adviser (USA Definition)
Advises on securities, as a business, for compensation.
Excluded from the Investment Adviser Definition
Banks, incidental professionals, broker-dealers, and publishers are not advisers at all.
Exemptions from State Adviser Registration
An adviser with no office in the state and only institutional or very few clients there.
De Minimis Exemption
No place of business in the state and fewer than 6 clients there in 12 months.
Federal Covered Adviser
An adviser registered with the SEC rather than the states.
Exempt Reporting Adviser
A private fund adviser exempt from SEC registration but still filing reports.
Notice Filing
The state filing a federal covered adviser or security makes instead of registering.
Investment Adviser Representative (IAR)
An individual who gives advice or solicits advisory business for an adviser.
IAR Continuing Education
12 credits a year: 6 Products and Practice, 6 Ethics and Professional Responsibility.
Broker-Dealer (USA Definition)
A firm in the business of effecting securities trades for others or its own account.
Agent (USA Definition)
An individual representing a broker-dealer or issuer in selling securities.
Issuer & Nonissuer Transactions
The entity that creates a security; nonissuer trades are between investors.
Security (USA Definition) & the Howey Test
Stocks, bonds, investment contracts and more - but not fixed insurance products.
Exempt Securities
Securities exempt from state registration - never from antifraud.
Exempt Transactions
Transactions that need no registration of the security, whatever the security.
Securities Registration: Coordination & Qualification
Coordination piggybacks on SEC registration; qualification is state-only.
Federal Covered Securities
Securities the states cannot require to register (NSMIA).
Offer, Sale & Jurisdiction
What counts as an offer or sale, and when it happens 'in' a state.
Cease-and-Desist Order
An Administrator's order to stop a violation - issuable without a prior hearing.
Denial, Suspension & Revocation of Registration
Requires both the public interest and a statutory ground.
Civil Liability & Rescission
An investor sold in violation of the Act can recover the purchase price.
Criminal Penalties
Willful violations: up to $5,000 fine and/or 3 years in prison; 5-year limit.
Consent to Service of Process
Appointing the Administrator to receive legal papers on the registrant's behalf.
Registration Effectiveness, Renewal & Withdrawal
Effective at noon on the 30th day; expires December 31; withdrawal takes 30 days.
Forms U4 & U5 (and Form ADV)
Individual registration and termination forms; the adviser's own registration form.
Books & Records Requirements
State advisers keep records at least 5 years; the Administrator can inspect any time.
Finder
A person paid to introduce investors to an issuer, without doing more.
Antifraud Provisions
Apply to every security and every transaction, registered or exempt.
Supervision
Firms must reasonably supervise their agents and IARs.