Uniform Securities Agent State Law (Series 63) Practice Exam

What does registration by notice filing apply to?

1. Securities that are federal covered

2. Securities that require state and federal registration

3. Only mutual funds

4. New issues of securities without prior registration

The correct answer is: Securities that require state and federal registration

The concept of registration by notice filing is specifically designed for certain types of securities that are already subject to federal registration requirements. This method is typically employed for securities that are considered "federal covered" securities. Federal covered securities, including those registered with the SEC, are not required to undergo the full registration process at the state level. Instead, states acknowledge the federal registration through notice filing, allowing the issuer to meet state requirements without duplicating effort. The correct answer pertains to securities that require state and federal registration because registration by notice filing simplifies the process for issuers who have already navigated the federal registration landscape. This approach minimizes the administrative burden for both issuers and regulators. By utilizing notice filing, states ensure that they remain informed about these federally registered securities while streamlining the regulatory process. In contrast, other options suggest scenarios that either do not align with the concept of registration by notice filing or misinterpret the nuances of securities registration requirements. Mutual funds are included under the umbrella of federal covered securities but are not exclusively associated with notice filing, making the option too narrow. New issues of securities without prior registration do not fall under notice filing since they would typically require a full registration process at the state level or may not be covered securities.