One-Page Cheat Sheet

This is the whole book at a glance. It assumes you have already worked through the units; each line is a memory jog, not a first lesson. If a line reminds you that you forgot something, go back to that unit's rapid-fire sheet.

Foundations of State Securities Law

• The Uniform Securities Act and State Administrator: The Uniform Securities Act (USA) is the model blue-sky law states adopt to police securities transactions, professionals, and offerings, and its antifraud provision has no exemptions. Each state's Administrator (title varies) enforces it, while the North American Securities Administrators Association (NASAA) only coordinates. Jurisdiction attaches when an offer is made or accepted in the state, so multiple states can reach one transaction. The Administrator can investigate, subpoena, and issue cease and desist orders alone, needs a court to enforce subpoenas or grant injunctions, and can never arrest or impose criminal penalties. Registration is "effective," never "approved."
• Key Definitions Under the USA: A person is nearly anyone or any entity, including a government, but never a minor, a deceased, or a mentally incompetent individual. A security is broad; the four-prong Howey Test (investment of money in a common enterprise expecting profit from others' efforts) captures investment contracts, and all four prongs must hold. Variable insurance, pooled interests, and receipts for deposited securities are securities; fixed insurance, commodities, direct real estate, and bank certificates of deposit are not. Both offers and sales trigger the Act, bonus and assessable-stock gifts count as sales, and issuer versus non-issuer comes down to who pockets the proceeds.

Regulation of Broker-Dealers (12%)

• Broker-Dealer Definition and Registration: A broker-dealer effects securities transactions for others (commission) or its own account (markup or markdown); banks, savings institutions, trust companies, and issuers are excluded, and so is an out-of-state firm with no in-state office dealing only with institutions, while even one retail client forces registration. Register per-state via Form BD plus an irrevocable consent to service of process; registration is effective at noon on the thirtieth day, never "approved," and net capital cannot exceed the federal requirement. The Administrator may deny, suspend, or revoke in the public interest with notice and hearing, cancels (non-punitively) firms that vanish, and honors a 30-day withdrawal it can freeze for a pending proceeding.
• Broker-Dealer Exemptions and Supervision: The USA excludes agents, issuers, banks, savings institutions, and trust companies from the broker-dealer definition, and it excludes a firm with no place of business in the state that deals only with institutions or with one existing out-of-state client, but that no-office exclusion needs both no office AND the right client type, and even excluded persons still face the antifraud rules. A registered firm owes ongoing recordkeeping, financial reports, prompt correcting amendments, consent to service of process, and records open to examination at any time. And failure to reasonably supervise is a standalone violation: the firm can be sanctioned even when it committed no underlying wrong, with written supervisory procedures that are actually enforced its only real defense.

Regulation of Broker-Dealer Agents (13%)

• Agent Definition and Registration: An agent is an individual who represents a broker-dealer or issuer in effecting securities transactions, so clerical staff and certain issuer representatives (exempt securities, exempt transactions, federal covered securities, no-commission employee sales) are excluded, while a broker-dealer representative almost always must register. Agents register on Form U4 with an irrevocable consent to service of process, register effective at noon on the 30th day, keep the form current with a prompt correcting amendment, and give the triple notice whenever they change firms. The Administrator may deny, suspend, revoke, cancel (non-punitive), or accept a withdrawal that takes effect 30 days after filing, always for cause and in the public interest.
• Agent Exemptions and Obligations: An individual representing an issuer in exempt securities, exempt transactions, or federal covered securities is not an agent, and neither is one selling to existing employees for no commission, though the antifraud provisions bind everyone. Everyone else effecting transactions must register, and both the agent and the employer are liable if they do not. Registration is employer-specific, goes inactive instantly on leaving, expires December 31, and demands three notifications on a firm change. The Administrator needs the public interest plus a statutory ground to deny, suspend, or revoke, may summarily suspend without a hearing, and may cancel as pure housekeeping.

Regulation of Investment Advisers (10%)

• Investment Adviser Regulation: An investment adviser gives Advice about securities, as a Business, for Compensation (the ABC test), and missing any one prong means no adviser. L.A.T.E. professionals (lawyers, accountants, teachers, engineers), banks, broker-dealers with incidental uncompensated advice, and impersonal publishers are excluded outright, while institutional-only and de minimis (5-or-fewer non-institutional clients, no in-state office) advisers are merely exempt from registration but still bound by antifraud rules. Register with Form ADV plus a once-filed irrevocable consent to service of process; state versus federal turns on assets under management (under $25 million state only, $100 million-plus federal), and federal covered advisers only notice-file.
• Regulation of Investment Adviser Representatives: An investment adviser representative is an individual who performs any one of five functions (advises, manages accounts, determines advice, solicits, or supervises those who do) for a registered investment adviser or federal covered adviser, and only clerical staff and non-securities advisers are excluded. Representatives register on Form U4 through their sponsoring firm, file an irrevocable consent to service, and go effective at noon on the 30th day. The registration is tied to the firm, and a representative of a federal covered adviser still registers with each state where they keep a place of business, not merely where clients live.

Registration of Securities and Issuers (9%)

• Securities Registration Methods: No security is offered or sold in a state unless it is registered, exempt, or federal covered. Filing suits seasoned issuers (toughest eligibility, easiest procedure) and coordination suits anyone registering federally at the same time, and both become effective automatically when the federal registration does. Qualification is the only method with no federal filing and the only one effective solely when the Administrator orders, at the price of the heaviest paperwork. Across all methods, registration lasts one year, reports come no more than quarterly, and stop orders demand the public interest plus a ground. Federal covered securities skip state registration for notice filing, keep state antifraud exposure, and, when exchange-listed, can never be stop-ordered.
• Exempt Securities and Exempt Transactions: A security is lawful in a state only if it is registered, a federal covered security, or exempt. An exempt security (government, bank, insurance stock and bonds, nonprofit, commercial paper) stays exempt in any trade; an exempt transaction (isolated non-issuer, unsolicited order, institutional buyer, fiduciary, private placement to 10 or fewer offerees in 12 months) exempts only that specific sale. Federal covered securities (exchange-listed, fund shares) are preempted from state registration but still owe notice filings. The Administrator cannot revoke government, financial-institution, or commercial-paper exemptions, and no exemption ever shields fraud.

Communication with Customers and Prospects (20%)

• Required Disclosures: Communication is the heaviest cluster on the exam, and this unit is its disclosure core. At a bank, give the four "not insured, not a deposit, not guaranteed, may lose value" disclosures both orally and in writing. Registration and exemption are never approval, endorsement, or recommendation, so a properly registered security is "effective," never "state-approved." Never guarantee a customer against loss or promise a specific return, though quoting a bond's coupon is a permitted fact. The Administrator may require pre-use, concurrent, or post-use filing of advertising but reaches neither exempt nor federal covered securities, and a state may demand records consistent with the federal standards but never beyond them.
• Customer Agreements and Account Types: A principal approves every new account, but the customer signs nothing to open a cash account. A margin account needs the margin agreement signed before trading, where the credit and hypothecation pieces are required and only the loan consent is optional. An options account needs the options disclosure document delivered at or before approval, a Registered Options Principal to approve, and the signed agreement returned within 15 days or the account can only close positions. The firm makes a reasonable effort to name a trusted contact person aged 18 or older to help protect eligible adults 65 or older. And two lines never move: registration is effective, never approved, and no agent may guarantee performance or share in a customer's losses.
• Advertising, Correspondence, and Social Media: The Administrator may require filing of any sales literature before, during, or after use, though exempt and federal covered securities are excluded. Registration is a procedural step and never approval, so "effective" is the only safe word and calling a security "approved," "endorsed," or "recommended" is unlawful, even a fully registered one. Guaranteeing a customer against loss is absolutely prohibited for both broker-dealers and agents, verbal promises included, and profit-sharing needs written consent from customer and firm plus proportional contribution. All advertising must be fair and not misleading, and every electronic and social-media communication must be supervised and retained, with static content treated as the firm's own advertising and adoption or entanglement making third-party posts the firm's responsibility.

Ethical Practices and Obligations (25%)

• Compensation and Fee Structures: A broker-dealer acts as agent (commission, disclosed separately) or principal (markup or markdown, embedded in price), never both on one trade, and every price and charge must be fair and reasonably related to current market value. The 5% policy is a guideline judged by seven factors, so an excessive charge is a violation even under 5% and even if disclosed. The NASAA dishonest practices sweep in unfair pricing, unreasonable service fees, churning (which needs control), and splitting commissions with unregistered persons. On mutual funds, disclose all sales charges and breakpoints, never sell just below a breakpoint or switch similar funds without a suitability basis, and remember Regulation Best Interest (Reg BI) binds broker-dealers at the best-interest standard while disclosure alone never cures an unfair price.
• Customer Funds, Custody, and Discretion: Client assets must stay separate from the firm's: commingling and conversion are always prohibited, with no exemption. Discretion means the professional picks the security, the amount, or the action, and an investment adviser needs written authorization in advance while a broker-dealer or agent may act on oral discretion but must obtain written authorization within 10 business days of the first discretionary trade. Time-and-price direction is not discretion. Full trading authorization adds withdrawal rights; limited does not. Broker-dealers owe best interest or suitability at recommendation, advisers owe a fiduciary duty, and trustees owe the prudent investor standard.
• Prohibited Activities and Conflicts of Interest: The NASAA dishonest and unethical practices catalog bans churning, unauthorized trading, guaranteeing against loss, market manipulation, and unpaid arbitration awards. Agents live under bright lines: never borrow from or lend to a customer (no exceptions), never sell away without written pre-approval before execution, and share in an account only with written consent from both the customer and the broker-dealer, proportional to contribution unless the customer is family. Add the mutual-fund rules (breakpoint and no-load disclosure, no switching for new sales charges) and the conflict framework (disclose and manage, best interest for broker-dealers versus fiduciary duty for advisers), and this unit answers itself.
• Fraud, Market Manipulation, and Insider Trading: Start from the antifraud provisions: they reach any person and every security, including exempt securities and exempt transactions, with no exemptions, and the Administrator's authority follows any offer made or accepted in the state. On that foundation sit the specific bans: manipulative devices (wash trades, matched orders, painting the tape), front-running and the spoofing-and-layering fake-order games, and insider trading on material nonpublic information in breach of a duty, where both tipper and tippee can be liable. Round it out with the agent-conduct rules (selling away needs prior written approval, outside accounts need prior written notice), the vulnerable-adult protections, and the flat ban on guaranteeing against loss.

Remedies and Administrative Provisions (11%)

• Administrator Powers and Administrative Actions: The Administrator's power splits cleanly into administrative (no court) and judicial (court required): alone the Administrator makes rules, investigates in or outside the state, subpoenas records, issues cease and desist orders with or without a hearing, and stop-orders securities and person registrations under the two-prong test (public interest AND a statutory ground, plus notice and hearing). But only a court grants injunctions, orders restitution, rescission, or disgorgement, enforces subpoenas through contempt, and imposes criminal penalties. Lock the numbers (60 days to appeal, 15 days to request a hearing, 30 days securities versus 90 days persons for known facts), and remember registrations become effective and never "approved."
• Criminal, Civil, and Judicial Remedies: A securities violation opens four doors: administrative (the Administrator issues cease and desist with no prior hearing), judicial (only a court grants injunctions, receivers, rescission, restitution, and disgorgement), criminal (willful violations carry the 5-5-3: a 5-year statute of limitations, a $5,000 fine, and up to 3 years imprisonment per violation, with a no-knowledge-of-the-rule defense that blocks prison but not fines), and civil (the buyer sues for rescission of price paid plus interest and attorneys' fees, less income received, with the burden flipped onto the seller and a 2-years-from-discovery or 3-years-from-sale limit, whichever is shorter). A written rescission offer ignored for 30 days ends the buyer's suit, and money or asset control always means a court.

That's the whole exam on one page. If you can read each line and hear the full unit behind it, you're ready.