State Registration and Post-Registration Requirements

The registration requirement, three methods, stop orders, and federal covered securities on one sheet.

What Does the Registration Requirement Cover?

• It is unlawful to offer OR sell a security in a state unless it is registered, exempt, or federal covered. An offer alone triggers the requirement. Offers, but not sales, are exempt once both state and federal registration statements are filed and no stop or refusal order is in effect or pending.
• If a security qualifies for more than one method, the registrant chooses, and a registered broker-dealer may file for the issuer.

What Are the Three Registration Methods?

• Filing (notification) has two routes. The seasoned-issuer route covers established federal reporters with strong financials: toughest eligibility, simplest procedure, and concurrent federal effectiveness after its filing period and fee payment, with no stop order or proceeding.
• The open-end fund and unit investment trust route requires the applicant's prior in-state registration within 24 months, or a sponsor's prior registration of a substantially identical UIT, plus compliance with those registrations and no material change since.
• That route is effective on the business day of filing or existing-registration expiration, whichever is last, with no federal effective-date tie.
• Coordination has no financial or operating-history tests, and its state and federal filings need not occur simultaneously. It is effective with the federal statement if no stop order is in effect, no proceeding is pending, filing periods have run, and the offering stays within filed price and compensation limits.
• Qualification needs no federal registration but may coexist with one. Any security qualifies; effectiveness requires the Administrator's order.

What Applies to All Methods, and How Do Stop Orders Work?

• Registration lasts one year, longer during a non-exempt distribution. Withdrawal is barred for one year while same-class securities remain outstanding.
• The Administrator may require prospectus delivery to each offeree, but may not demand reports more often than quarterly.
• Escrow and impounding reach coordination and qualification only, never filing.
• A stop order can deny, suspend, or revoke effectiveness. It needs the public interest AND a statutory ground, and the Administrator may later modify or vacate it.
• A summary suspension can come first. On written request the Administrator must set a hearing within 15 days, and may also order one unprompted. A final stop order needs notice, a hearing opportunity, and written findings.

What Are Federal Covered Securities?

• They are exempt from state registration, but federal preemption preserves state anti-fraud authority.
• Investment company, qualified-purchaser-sold, other exempt-offering, and uncapped Regulation D securities may owe a notice filing and fee. Exchange-listed securities owe neither; smaller-dollar Regulation D offerings are not federal covered.
• Exchange-listed covered securities are excluded from the notice-filing stop-order provision. For other covered categories, that provision reaches valid notice-filing failures when the order is in the public interest, never merit review.

What Is the Federal Offering Timeline?

• Pre-filing: no sales; offers only under narrow exceptions. Cooling-off: oral offers, qualifying written prospectuses, and limited identifying notices; no sales. Post-effective: sales may begin, while delivery of the security remains subject to final-prospectus or access-and-notice duties.
• A tombstone ad is not a prospectus and is limited to permitted identifying content. Under its conditions it may solicit an offer, but it never replaces detailed disclosure or delivery compliance.

Which One-Liners Win Points?

• Offers alone require registration, not just completed sales.
• Filing has the toughest eligibility but the easiest procedure; "easy to file" is not "easy to qualify."
• Coordination effectiveness rides on the federal registration; qualification is the only method that waits for the Administrator's order, and nothing about it is automatic.

Which Numbers Matter Most?

Which Gotchas Trip Students Up?

• For an offering needing state registration, no federal filing means qualification. With a federal filing but no filing-route eligibility, coordination is usually simpler; qualification remains available.
• Escrow and impounding attach to coordination and qualification, not filing.
• On nonreceipt of the required coordination notice and post-effective price amendment, the Administrator may enter the specified stop order without notice or hearing, promptly notifying the registrant. Proof that those submissions complied makes the order void as of entry.
• Federal covered securities still face state anti-fraud enforcement. Exchange-listed ones are excluded from notice-filing stop orders, while antifraud remedies remain available.

One-Breath Recap

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). Coordination requires a federal registration statement for the same offering, without simultaneous filings. Both can become effective with federal registration when their conditions are met; filing's second route for open-end funds and unit investment trusts instead takes effect on the business day of filing or existing-registration expiration, whichever is last. Qualification needs no federal filing and takes effect only when the Administrator orders. Across all methods, registration lasts one year or longer during a non-exempt distribution; reports come no more than quarterly, and escrow reaches coordination and qualification but never filing. Federal covered securities skip state registration but keep state anti-fraud exposure.

Need more than the recap? Read the full State Registration and Post-Registration Requirements unit.