Filing of Sales and Advertising Literature

With the rules about what must be disclosed and what must never be said, the next question is: who oversees the communications that go out to investors? Under the Uniform Securities Act (USA), the state Administrator has broad authority to require firms to file their marketing materials.

Administrator's Authority

Under USA Section 403, the Administrator may, by rule or order, require the filing of any:

  • Prospectus
  • Pamphlet
  • Circular
  • Form letter
  • Advertisement
  • Other sales literature or advertising communication addressed or intended for distribution to prospective investors, including clients or prospective clients of an investment adviser

Limitation on Filing Authority

This filing authority does NOT apply to:

  • Securities or transactions that are exempt under Section 402
  • Federal covered securities

Flexibility of the Filing Requirement

Section 403 does not mandate a single approach. The Administrator has flexibility to require different timing for different situations:

Filing TypeDescription
Pre-use filingApproval before distribution
Concurrent filingFiling at the time of use
Post-use filingFiling after distribution
  • The Administrator may apply different filing requirements to different types of securities or communications through rulemaking authority under Section 412(a)
  • The Administrator's rulemaking authority gives broad discretion to tailor requirements as needed

Filing Does NOT Equal Approval

Consistent with Section 405 (covered in the previous section), the Administrator reviewing marketing materials does NOT constitute endorsement of the content.

  • Filing is a compliance obligation, not a seal of approval
  • Even if the Administrator reviews and does not object to a filing, that is not an endorsement
  • This principle applies equally to pre-use, concurrent, and post-use filings

Exam Tip: Gotchas

Remember the consistent theme: nothing the Administrator does constitutes approval, endorsement, or recommendation. This applies to registration of persons, registration of securities, AND filing of advertising materials. If an exam question asks whether Administrator review of filed materials equals approval, the answer is always no.