Uniform Securities Agent State Law (Series 63) Practice Exam

What characterizes registration by coordination?

1. Only applies to state securities laws

2. Registration becomes effective when both federal and state filings are complete

3. Registration is solely based on federal law

4. It is for exempt securities only

The correct answer is: Registration becomes effective when both federal and state filings are complete

Registration by coordination is characterized by the provision that it becomes effective when both federal and state filings are complete. This method allows an issuer to file in a state simultaneously with a federal registration statement, creating a streamlined process for registration. It provides an efficient approach for companies looking to raise capital, as they don't have to wait separately for state approvals after their federal registration is effective. This synchronization of filings is significant, as it enables issuers to expedite their offerings. The coordination approach is designed to facilitate compliance with both sets of regulations, rather than operate independently, which is why stating that registration effective at both levels is a defining feature is accurate. The other choices reflect misunderstandings about the nature of registration by coordination. It is not exclusive to state securities laws; it indeed interacts with both federal and state laws. It's also not solely based on federal law since it incorporates state requirements. Additionally, registration by coordination applies to registered securities, not just exempt ones.