Definition
Registration by Filing
A state securities registration method under the Uniform Securities Act (also called registration by notification) with the strictest eligibility of the three methods. It is open only to seasoned issuers that are also registering with the SEC and meet strict operating-history, SEC-reporting and financial tests, or to open-end funds and unit investment trusts with a prior qualification in the state. A seasoned issuer's registration becomes effective with the federal registration once its filing has been on file for the required period (5 business days in the model act, or a shorter period the Administrator allows) and the fee is paid, and a qualifying fund's becomes effective on the business day of filing or when its existing registration expires, whichever is later, unless the Administrator orders an earlier date, in each case if no stop order or stop-order proceeding is pending. It is not the notice filing that federal covered securities such as mutual funds make, where the state may require copies of SEC filings, a consent to service of process, and fees but conducts no registration review.
An established company whose stock is quoted over the counter (so it is not a federal covered security) files a registration statement with the SEC for a new offering. It has been in U.S. business and reporting to the SEC for at least 36 months, has had at least 4 market makers, will price the shares at no less than $5, and meets the rest of the seasoned-issuer tests. It registers by filing in Texas: it files a statement demonstrating its eligibility with the required documents and pays the fee, and the Texas registration becomes effective with the SEC registration once the filing has been on file for the required period and no stop order is pending. A Vanguard index mutual fund, by contrast, is a federal covered security and makes only a notice filing in Texas.
Students often confuse registration by filing with notice filing. Registration by filing is a true state registration with the strictest eligibility of the three methods (a long SEC reporting record and strong financials, or a fund's prior qualification in the state), and the Administrator can still deny or suspend it by stop order. Notice filing is what federal covered securities such as mutual funds do instead of registering: the state may require copies of the SEC filings, a consent to service of process, and fees, but conducts no merit review. Registration by coordination is open to any issuer registering with the SEC and, like the seasoned-issuer route of registration by filing, becomes effective with the federal registration once its conditions are met.
How is Registration by Filing tested on the exam?
- Identifying when registration by filing applies versus registration by coordination or qualification
- Distinguishing registration by filing (a state registration open only to seasoned issuers and previously qualified funds) from the notice filing that federal covered securities make
- Recognizing state authority limits over federal covered securities (fees and anti-fraud only, no merit review)
- Determining which securities qualify as federal covered (mutual funds, exchange-listed, investment companies)
- Comparing the three state registration methods and their effective dates
Regulatory limits
Regulatory Limits
| Description | Limit | Notes |
|---|---|---|
| Effective date for registration by filing | With the federal registration (seasoned issuer); business day of filing or expiration of the existing registration, whichever is later, unless the Administrator orders an earlier date (qualifying fund) | Seasoned issuer: on file 5 business days in the model act (or a shorter period allowed) with the fee paid; in every case no stop order or Section 306 proceeding pending |
| Securities eligible for registration by filing | Seasoned issuers registering with the SEC, or open-end funds and UITs qualified in the state within the prior 24 months | Seasoned-issuer tests include 36 months of U.S. operations and SEC reporting, 500 record holders, at least 4 market makers, underwriting compensation of no more than 10%, and a $5 minimum price for equity |
| State authority over registration by filing | Full stop-order authority under USA Section 306 | A true state registration that the Administrator can deny, suspend, or revoke; it is not the notice filing made for federal covered securities |
Registration by Filing = "Proven, so file less": only issuers that have already proven themselves (36 months of SEC reporting, strong financials, 4 market makers, a $5 price), or funds already qualified in the state, can use it, and in return they file the least paperwork. Strictest to qualify, simplest to file. It is not notice filing, the separate route for federal covered securities such as mutual funds, which file and pay fees but are never registered or merit-reviewed by the state.
Practice questions
Test your understanding with the questions below. Pick an answer to reveal the explanation.
Fidelity Investments plans to sell shares of its Fidelity 500 Index Fund (a mutual fund registered under the Investment Company Act of 1940) in California. The fund is also registered with the SEC. The California securities Administrator reviews the offering documents and believes the management fees are too high and not in the best interest of California investors. Which of the following actions can the Administrator take?
C is correct. A mutual fund registered under the Investment Company Act of 1940 is a federal covered security, so California cannot require it to register at all. Under Securities Act Section 18, the state may require a notice filing (copies of the documents filed with the SEC, a consent to service of process, and a fee), but it cannot impose conditions based on the merits of the offering, such as its fee levels. This is notice filing, not registration by filing, which is a state registration for seasoned issuers.
A is incorrect because a state may not apply registration or merit review to a federal covered security. B is incorrect because the state cannot condition the offering on the merits of the fee structure. D is incorrect because a federal covered security is not registered with the state by any method; it makes only a notice filing.
The Series 65 exam tests your understanding of state authority limits over federal covered securities. Knowing that the notice filing a federal covered security makes allows fee collection and anti-fraud enforcement but no merit review, and that it is not registration by filing, is critical for questions about regulatory jurisdiction and the division of federal-state authority under NSMIA.
A seasoned issuer registers by filing in a state that uses the model act waiting period. Assuming the fee is paid and no stop order is pending, when does the state registration become effective?
C is correct. Under Uniform Securities Act Section 302(c)(1), if the filing has been on file with the Administrator for at least 5 business days (or a shorter period the Administrator allows) and the fee has been paid before the federal registration statement becomes effective, the state registration becomes effective automatically at the same moment as the federal registration, provided no stop order or Section 306 proceeding is pending. If the federal registration becomes effective first, the state registration becomes effective when the conditions are met.
A describes registration by qualification, which becomes effective when the Administrator so orders. B borrows the 10-day filing period from registration by coordination and ignores the federal effective date. D is incorrect because the Act sets no 30-day delay; effectiveness is tied to the federal registration.
The Series 65 exam frequently tests your knowledge of the three state registration methods and their different effective dates. Understanding that registration by filing, like coordination, becomes effective with the federal registration once its conditions are met, while qualification waits for an Administrator order, is essential for distinguishing the three methods.
ABC Corporation has its common stock listed on the New York Stock Exchange and plans to sell new bonds, senior to that stock, in multiple states. What state registration or filing does ABC need for the bonds?
C is correct. Under Securities Act Section 18(b)(1), a security listed on a national securities exchange is a federal covered security, and so is any security of the same issuer that is equal or senior to it, so ABC's bonds are federal covered. Section 18(c)(2)(D) bars a state from requiring any filing or fee for these securities, so ABC makes no state registration and no notice filing; the states keep their antifraud authority.
A, B, and D are incorrect because all three are state registration methods, and Section 18(a) bars a state from requiring registration of a federal covered security. Registration by filing in D is a state registration for seasoned issuers whose securities are not federal covered; being seasoned does not make it required here.
The Series 65 exam tests your ability to identify when securities are federal covered and so escape state registration. Understanding the senior security rule (bonds of an exchange-listed issuer are federal covered) and that listed securities make no state notice filing is critical for telling notice filing apart from registration by filing.
All of the following statements about registration by filing are accurate except
C is correct (the exception). No Administrator order is needed. Under Section 302(c), registration by filing becomes effective automatically: for a seasoned issuer, with the federal registration once the filing has been on file for 5 business days (model act) and the fee is paid; for a qualifying fund, on the business day of filing or when its existing registration expires, whichever is later. In each case no stop order or proceeding may be pending. An Administrator order is what registration by qualification requires.
A is accurate: both routes in Section 302(a) cover securities for which a registration statement has been filed under the Securities Act of 1933. B is accurate: Section 302(c) conditions effectiveness on payment of the registration fee. D is accurate: the stop-order standards in Section 306 govern all three registration methods, including registration by filing.
The Series 65 exam tests your understanding of the fundamental differences between the three registration methods. Registration by filing and registration by coordination both become effective automatically with the federal registration once their conditions are met (a qualifying fund registering by filing becomes effective on the business day of filing or when its existing registration expires, whichever is later), while registration by qualification requires an Administrator order. Confusing these effective dates is a common exam mistake.
T. Rowe Price is filing to offer its Growth Stock Fund (a mutual fund registered with the SEC under the Investment Company Act of 1940) in Florida. Which of the following statements about Florida's authority over this offering are accurate?
1. Florida may require T. Rowe Price to file copies of its SEC registration documents
2. Florida may deny the registration if the Administrator believes the fees are excessive
3. Florida may require T. Rowe Price to pay a filing fee
4. Florida may enforce anti-fraud provisions against T. Rowe Price if the fund makes material misrepresentations
B is correct. Statements 1, 3, and 4 are accurate.
Statement 1 is true: Florida may require T. Rowe Price to file copies of its SEC registration documents and amendments. This is one of the limited notice filing requirements states can impose on federal covered securities.
Statement 2 is false: Florida cannot deny registration based on merit review (such as excessive fees). Federal covered securities are exempt from state registration and merit review under the National Securities Markets Improvement Act of 1996; the fund makes only a notice filing.
Statement 3 is true: Florida may require T. Rowe Price to pay a filing fee. States retain the authority to collect fees from federal covered securities.
Statement 4 is true: Florida retains full authority to enforce anti-fraud provisions against T. Rowe Price. While states cannot conduct substantive regulation of federal covered securities, they can investigate and prosecute fraud, material misrepresentations, and other anti-fraud violations.
The Series 65 exam tests multi-dimensional understanding of state authority over federal covered securities. You must know that states can require filings, collect fees, and enforce anti-fraud laws, but cannot conduct merit review or deny effectiveness. This division of authority is fundamental to understanding the National Securities Markets Improvement Act of 1996 and to telling notice filing apart from registration by filing.
What concepts relate to Registration by Filing?
This term is part of this cluster :