For the Series 63 securities registration tends to be a topic we hear a lot. Many students get confused between the three most common ways discussed on this exam. In today’s post, we will provide you with some quick and easy tips on how to remember the three ways to register securities with a state administrator.
Series 63 Securities Registration: Start with Keywords
When it comes to memorizing the differences between securities registration methods with a state, there are a few keywords that tend to help students remember what type of registration goes for what type of scenario.
Let’s start with registration by qualification. Securities should be registered with a state administrator by qualification when the focus is on intrastate offerings. Intrastate is the keyword!
The main idea is that if you have a business, that’s only dealing with one state and you’re selling securities only in that state, then there’s no need to get the federal government involved.
Thus, registration using the qualification method is for offerings unique to one state. The other important thing to know with registration by qualification is that it is the only one of the three where you do need feedback from the administrator. Specifically, you need them to make your registration effective.
Note: The other securities registration methods do not need specific feedback from the administrator. They are more “drive-by” registrations. You notify the administrator and that is it.
Registration by Coordination
When it comes to registration by coordination, just remember that the word “coordination“ requires more than one party.
In other words, in order to “coordinate” anything the idea is that you are involving two people or two governments in this case. For the registration by coordination you are coordinating registration with the SEC and with the state. Usually this happens for IPOs. With a typical IPO, you need to register with the federal government, or the SEC. However, you may decide you want to also register with the state government while you’re doing all the paperwork. Therefore, an issuer can register their securities using the coordination method. The keyword here is usually a new offering, or some indication that it is an IPO.
Registration by Notification or Filing
The last method of registration is registration by notification. This is typically for large established businesses. These businesses often have certain size requirements, net worth requirements, etc. Since they are established businesses, they only need to notify the administrator in the state in which they want to register their securities. Again, you should know that you do not need to receive any feedback from the administrator here.
In a nutshell, all of these are challenging areas of the Series 63 exam. Many people ask us about this topic for good reason. If you need any help, feel free to reach out to a Series 63 Tutor or contact us directly. Good luck!