Uniform Securities Agent State Law (Series 63) Practice Exam 2026 - Free Series 63 Practice Questions and Study Guide

Securities issued by investment companies under the Investment Company Act are classified as federal covered securities because they are regulated at the federal level rather than the state level. The Investment Company Act establishes specific requirements for investment companies, ensuring that these securities meet certain standards of disclosure and regulatory compliance. This designation allows these securities to be offered and sold to investors without needing to be registered in each individual state, providing a streamlined process for the issuance of these securities across state lines.

In contrast, securities issued by local municipalities, securities traded on the NYSE, and securities issued by individual entrepreneurs typically fall under state jurisdiction and are not classified as federal covered securities. Local municipalities often issue bonds or other types of securities that are subject to state regulations. Similarly, while securities traded on the NYSE may have a broader appeal, they are not inherently federal covered securities unless they meet specific criteria established by the SEC. Individual entrepreneurs' securities would generally be subject to state securities laws and regulations as well, unless they are also a type of investment company or meet other specific federal requirements.