The State Securities Administrator

Each state's Administrator operates independently under that state's own appointment procedures, since the USA itself does not dictate how a state selects or organizes its Administrator.

Who Is the Administrator and What Do They Do?

• The Administrator is the state official or agency designated to administer and enforce the state's securities laws
• The title varies by state:
  • Commissioner (e.g., Securities Commissioner)
  • Director (e.g., Director of Securities)
  • Secretary of State (in some states)
  • Other titles depending on the jurisdiction
• The Administrator is appointed or designated according to each state's own procedures. The USA leaves this to the individual state
• Each state has its own Administrator; there is no single national Administrator

NASAA vs. the Administrator:

• NASAA (North American Securities Administrators Association) is the organization that coordinates among state Administrators
• NASAA itself is NOT a regulator and does NOT have enforcement authority
• NASAA creates model rules and coordinates policy, but individual state Administrators enforce the law

Exam Tip: Gotchas

• NASAA is a coordinating body, not a regulator. It cannot bring enforcement actions, issue orders, or investigate violations. Only the individual state Administrator can do those things within their state.
• The Administrator's title varies by state. It may be Commissioner, Director, Secretary of State, or something else entirely. The exam does not assume a single title.

What Can the Administrator Do With Confidential Information?

The Administrator has access to sensitive information filed by registrants and obtained through investigations. The USA imposes strict limits on how that information can be used:

• It is unlawful for the Administrator or any officers/employees to use non-public information for personal benefit
• The Administrator may not disclose non-public information except:
  • Among the Administrator's own staff
  • When necessary or appropriate in a proceeding or investigation under the Act

What this means in practice:

• An Administrator's employee who trades on confidential information from a filing violates the confidentiality rule
• The Administrator can share information with staff members working on an investigation
• The Administrator can use information in formal proceedings under the Act

Exam Tip: Gotchas

• Confidentiality applies to the Administrator's own staff too. Officers and employees cannot use non-public information obtained through their work for personal benefit.

What Rulemaking Power Does the Administrator Have?

The Administrator has the power to:

• Make, amend, and rescind rules, forms, and orders necessary to carry out the provisions of the Act
• Rules must be consistent with the Act and follow applicable state administrative procedures
• No rule, form, or order may be made, amended, or rescinded unless the Administrator finds the action necessary or appropriate in the public interest or for investor protection
• All rules and forms must be published
• Require or permit persons to file statements in writing, under oath or otherwise as the Administrator determines, concerning matters under investigation

Think of it this way: The USA is the blueprint, but the Administrator is the builder. Each state's Administrator fills in the gaps by making rules specific to that state, as long as those rules stay consistent with the Act and are actually published.

Exam Tip: Gotchas

• The Administrator can require written statements under oath. This applies to both investigations and rulemaking proceedings.
• Rulemaking has two separate guardrails. A rule must be consistent with the Act, AND the Administrator must find it necessary or appropriate in the public interest or for investor protection. An answer that only checks one guardrail is incomplete.

What Should You Check on Exam Day?

• Do not assume a fixed title. The Administrator could be called Commissioner, Director, Secretary of State, or something else in the question.
• Remember NASAA coordinates; it does not investigate, issue orders, or enforce anything.
• Confidentiality binds the Administrator's own staff, not just outsiders. Personal-benefit use of non-public filed information is unlawful either way.
• A written statement can be required or permitted, and the oath itself is at the Administrator's discretion, not automatic.
• A rule is only valid if it is both consistent with the Act and published, and the Administrator found it necessary or appropriate for the public interest or investor protection.