Registration by Coordination
Registration by Coordination
A state securities registration method under the Uniform Securities Act for securities simultaneously registered with the SEC under the Securities Act of 1933. The state registration becomes effective at the same time as the SEC registration, provided no stop order is pending, the minimum filing period (10-20 days depending on state) has elapsed, and required pricing information was filed at least 2 business days prior. Most efficient method for multi-state public offerings because it coordinates federal and state filings into a single effective date.
TechStart Inc. plans to raise $50 million through an initial public offering (IPO) to investors in 15 states. The company files a registration statement with the SEC under the Securities Act of 1933 and simultaneously files registration by coordination documents with each state securities administrator. When the SEC declares the registration effective on March 15, all state registrations automatically become effective the same day (assuming each state's minimum filing period has elapsed and no stop orders are pending). This allows TechStart to begin selling securities in all 15 states simultaneously without managing different effective dates.
Students often confuse registration by coordination with registration by qualification. Key distinction: Coordination requires simultaneous SEC registration and becomes effective when the SEC declares it effective. Qualification does NOT require SEC registration and becomes effective only when the state Administrator orders it effective. Also commonly confused: thinking state approval is needed separately for coordination, but state registration is automatic once SEC is effective (unless state issues stop order).
How This Is Tested
- Identifying when registration by coordination is the appropriate method (securities also registered with SEC)
- Understanding the automatic effectiveness timing (same time as SEC, not requiring separate state approval)
- Recognizing required documents for coordination (prospectus, articles of incorporation, underwriting agreement)
- Determining conditions that prevent automatic effectiveness (stop order, minimum filing period not elapsed, pricing statement not filed 2 days prior)
- Comparing coordination versus qualification effectiveness timing and Administrator discretion
Regulatory Limits
| Description | Limit | Notes |
|---|---|---|
| Automatic effective date | Same time as SEC registration becomes effective | Provided no stop order, minimum filing period elapsed, and pricing filed 2 days prior |
| Minimum state filing period | 10 to 20 days | Varies by state; must elapse before registration can become effective |
| Price statement filing requirement | 2 business days before effectiveness | Maximum and minimum offering prices and underwriting discounts must be on file |
| Registration effectiveness period | 1 year from effective date | All registration statements effective for one year; can extend if conditions met |
Example Exam Questions
Test your understanding with these practice questions. Select an answer to see the explanation.
Sunrise Solar Corp. is planning a $75 million initial public offering to raise capital for expansion. The company wants to sell shares to investors in California, Texas, New York, and 8 other states. Sunrise has filed a registration statement with the SEC under the Securities Act of 1933 and expects SEC effectiveness in approximately 30 days. Which state registration method is most appropriate for Sunrise's multi-state offering?
B is correct. Registration by coordination is the most appropriate method when securities are simultaneously registered with the SEC and being offered in multiple states. This method allows Sunrise to file with each state securities administrator and have all state registrations automatically become effective when the SEC declares the registration effective, creating a single coordinated effective date across all jurisdictions.
A is incorrect because registration by qualification is used for securities NOT registered with the SEC (typically intrastate offerings or private placements going public at the state level). Qualification would be inefficient here because each state Administrator would set different effective dates. C is incorrect because notice filing applies to federal-covered securities like mutual funds registered under the Investment Company Act of 1940, not new IPO securities registered under the Securities Act of 1933. D is incorrect because SEC registration does not preempt state registration requirements for new securities offerings; states retain authority to require registration of new issues sold to their residents.
The Series 65 exam tests your ability to identify the appropriate state registration method based on the offering context. Understanding that coordination is used for SEC-registered securities and provides the efficiency of simultaneous effectiveness across multiple states is critical for questions about multi-state public offerings and regulatory compliance.
When does a state securities registration by coordination become effective?
C is correct. Registration by coordination becomes effective at the same time as the SEC registration becomes effective, provided that (1) no stop order is pending from the state Administrator, (2) the minimum state filing period (10-20 days depending on state) has elapsed, and (3) the pricing statement was filed at least 2 business days prior to effectiveness. This automatic coordination is the defining feature of this registration method.
A is incorrect because this describes registration by qualification, where the state Administrator has discretion to set the effective date and must issue an order. Coordination does not require an Administrator order if conditions are met. B is incorrect because the effectiveness is not automatic after a fixed period; it depends on when the SEC registration becomes effective. The 10-20 day minimum filing period must elapse, but effectiveness still ties to SEC timing. D is incorrect because the 2-business-day pricing requirement is a condition that must be met, but effectiveness is still tied to SEC effectiveness, not 2 days after the pricing filing.
The Series 65 exam frequently tests the effectiveness timing for different state registration methods. Understanding that coordination automatically becomes effective when SEC does (unlike qualification, where Administrator sets the date) is a high-yield exam topic that distinguishes the three registration methods.
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Access Free BetaCoastal Industries filed for registration by coordination in Florida on January 10 for a securities offering also registered with the SEC. Florida requires a 15-day minimum filing period. The pricing statement (maximum and minimum offering prices and underwriting discounts) was filed on January 28. The SEC declared the registration effective on January 30. On what date does Coastal's Florida registration become effective?
D is correct. The pricing statement must be on file for at least 2 business days BEFORE the SEC effective date. Timeline analysis: January 28 (pricing filed) + 2 business days = January 30 at earliest. However, the SEC became effective on January 30, which is the same day the 2-business-day period would complete. The requirement is 2 business days BEFORE effectiveness, meaning the pricing must be filed by January 28 to allow effectiveness on February 1 (not January 30). Since the SEC became effective January 30 but the pricing was not on file for 2 full business days prior (would need filing by January 26 for January 30 effectiveness), Florida's automatic effectiveness is blocked until the pricing requirement is satisfied.
A is incorrect because while the 15-day minimum filing period was satisfied (January 10 + 15 days = January 25), this is only one of three conditions; the pricing timing also matters. B is incorrect because effectiveness is not tied to when pricing is filed, but to when SEC registration becomes effective (provided all conditions met). C is incorrect because the 2-business-day pricing requirement was not satisfied before the SEC effective date, preventing automatic effectiveness on January 30.
The Series 65 exam tests your ability to apply the multiple conditions required for coordination effectiveness: minimum filing period, pricing statement timing, and SEC effectiveness. Understanding that ALL conditions must be satisfied simultaneously and that the pricing must be filed 2 business days BEFORE (not on) the SEC effective date is essential for timeline calculation questions.
All of the following are characteristics of registration by coordination EXCEPT
C is correct (the EXCEPT answer). In registration by coordination, the state Administrator does NOT set the effective date. The registration automatically becomes effective when the SEC registration becomes effective (provided minimum filing period elapsed, no stop order pending, and pricing filed 2 days prior). The Administrator setting the effective date is the defining characteristic of registration by QUALIFICATION, not coordination.
A is accurate: Registration by coordination requires that securities be simultaneously registered with the SEC under the Securities Act of 1933. This is what distinguishes coordination from qualification. B is accurate: The automatic effectiveness at the same time as SEC registration is the core feature of coordination, allowing issuers to coordinate federal and state effectiveness. D is accurate: Registration by coordination requires filing the prospectus, articles of incorporation, and underwriting agreement with the state securities administrator, along with other documents required by the state.
The Series 65 exam tests your ability to distinguish between registration by coordination (automatic effectiveness tied to SEC) and registration by qualification (Administrator discretion on effective date). This distinction is frequently tested through EXCEPT questions that identify which characteristics apply to which registration method.
Metro Bank Corporation filed for registration by coordination in Ohio on February 1 for a $200 million bond offering also registered with the SEC. Ohio requires a 20-day minimum filing period. Which of the following conditions must be satisfied for Ohio's registration to become effective automatically when the SEC registration becomes effective?
1. The minimum 20-day filing period in Ohio has elapsed
2. The Ohio state securities Administrator has issued an order approving the registration
3. No stop order from the Ohio Administrator is pending
4. The pricing statement was filed at least 2 business days before the SEC effective date
B is correct. Statements 1, 3, and 4 are required conditions.
Statement 1 is TRUE: The minimum state filing period (20 days in Ohio) must elapse before the registration can become effective. This ensures the state has adequate time to review the filing. If the SEC becomes effective before 20 days elapse, Ohio's registration would not become effective until day 20.
Statement 2 is FALSE: Registration by coordination does NOT require the state Administrator to issue an approval order. This is the key difference from registration by qualification. Coordination becomes effective automatically when conditions are met; no Administrator order is needed (unless the Administrator issues a stop order to prevent effectiveness).
Statement 3 is TRUE: No stop order can be pending from the state Administrator. If the Administrator finds the registration incomplete, misleading, or fraudulent, they can issue a stop order that prevents the registration from becoming effective, even if the SEC registration is effective.
Statement 4 is TRUE: The pricing statement (maximum and minimum offering prices and underwriting discounts) must be filed with the state at least 2 business days before the effective date. This gives the state time to review final pricing before effectiveness.
The Series 65 exam tests detailed knowledge of the conditions required for registration by coordination to become effective automatically. Understanding that Administrator approval is NOT required (distinguishing coordination from qualification) but that timing requirements, stop order absence, and pricing filings ARE required is critical for complex registration questions.
💡 Memory Aid
Think of registration by coordination like synchronized swimming: The SEC and states dive in together at the exact same moment (simultaneous effectiveness). Coordinate = dancing together, both registrations become effective at the same time. Contrast with qualification where the state Administrator is the solo judge who decides when you can dive in (Administrator sets date). Remember: Coordination = Choreographed together with SEC.
Related Concepts
This term is part of this cluster: