This chapter covers 9% of the Series 63 exam (approximately 5 questions).
What You'll Learn
| Unit | Topic | Key Concepts |
|---|---|---|
| 1 | Definition of Securities and Issuers | What is and is not a security, the Howey Test, offers and sales, issuer vs. non-issuer |
| 2 | State Registration and Post-Registration Requirements | Filing, coordination, and qualification; federal covered securities; stop orders |
| 3 | Exemptions from Registration | Exempt securities, exempt transactions, and denial or revocation of an exemption |
| 4 | State Enforcement and Antifraud Authority | The antifraud provisions, jurisdictional scope, and the reach of the Act |
Why This Chapter Matters
A security is lawful in a state only if it is registered, federal covered, or exempt. The antifraud provisions sit here too, because they define how far the Act reaches, and they have no exemptions at all.
Exam Strategy
At 9% of the exam, this chapter produces about 5 questions. Focus on:
- The Howey Test has four prongs and all four must hold; "efforts of others" means primarily, not solely
- Three registration methods: qualification (state only), coordination (SEC and state together), and notice filing (federal covered)
- An exempt security stays exempt in any trade; an exempt transaction exempts only that sale
- No exemption ever shields fraud