Beyond the standards that bar deceptive communications, the Uniform Securities Act gives the state Administrator a separate power: the authority to require firms to file their sales and advertising literature.
Administrator's Authority to Require Filing
Under the USA, the state Administrator may by rule or order require the filing of any:
- Prospectus
- Pamphlet
- Circular
- Form letter
- Advertisement
- Other sales literature or advertising communication
The filing requirement applies to materials addressed or intended for distribution to prospective investors, including clients or prospective clients of an investment adviser.
Timing Flexibility
The Administrator has flexibility to require filing:
- Before use (pre-use)
- Concurrently with use
- After use (post-use)
The specific timing depends on the Administrator's rules or orders. Combined with the Administrator's classification authority, the Administrator can apply different filing formulas to different types of securities.
Limitations on the Filing Requirement
The filing requirement does not apply to:
- Securities or transactions exempt under the USA's exempt-securities provisions
- Federal covered securities (securities listed on national exchanges, investment company securities, etc.)
Exam Tip: Gotchas
- The filing requirement is discretionary, not automatic. The Administrator "may" require filing; not every communication must be filed.
- Federal covered securities are excluded. State filing requirements do not apply to securities listed on national exchanges or investment company securities.
- Exempt securities are also excluded. The exam may test whether a specific type of sales literature falls within one of these exemptions.
- The filing requirement covers all types of sales literature, not just advertisements; pamphlets, circulars, form letters, and prospectuses are all included.
- The Administrator can require filing before, during, or after use. Timing is flexible and set by the Administrator's rules or orders.