Registration by Coordination

Registration by coordination is the most common method for registering securities that are also being registered with the SEC. It allows issuers to "coordinate" state registration with their federal registration, using essentially the same documents.

When Coordination Is Used

Registration by coordination is appropriate when:

SituationUse Coordination?
IPO being sold in multiple statesYes
Follow-on offering with SEC registrationYes
Securities registered with SEC under 1933 ActYes
Intrastate offering (one state only)No—use qualification
Federal covered securitiesNo—use notice filing

Key Rule: Coordination is used whenever the issuer is also filing a registration statement with the SEC under the Securities Act of 1933 in connection with the same offering.

Filing Requirements

Documents Required

To register by coordination, the issuer must file:

DocumentDescription
Copies of SEC DocumentsProspectus, registration statement, amendments
State Filing FormUniform form or state-specific application
Consent to Service of ProcessAppoints Administrator as agent
Filing FeeState-determined amount

Information That Must Be Provided

InformationDetails
Amount of SecuritiesTotal being registered in the state
Adverse OrdersAny stop orders from other states
Federal EffectivenessAnticipated date of SEC effectiveness
Selling AgentsList of broker-dealers participating

Simplicity: The coordination process is designed to minimize duplication—the issuer uses the same documents filed with the SEC rather than preparing separate state documents.

Amendments

The issuer must file amendments with the state when:

EventRequirement
SEC AmendmentFile copy with state promptly
Material ChangeAmend state registration
Change in OfferingUpdate state filing

Effective Date of Registration

This is the most tested aspect of coordination:

Automatic Effectiveness

Registration by coordination becomes effective automatically when:

ConditionRequirement
SEC EffectivenessFederal registration must be effective
No Stop OrderAdministrator hasn't issued stop order
Filing DurationState filing on file for specified period

The Timing Rule

SituationWhen State Registration Becomes Effective
Standard RuleSimultaneously with SEC effectiveness
Required Filing PeriodState filing must be on file for specified days before SEC effective date
Administrator ActionAdministrator may accelerate or delay

Exam Tip: Registration by coordination becomes effective at the same time as the federal (SEC) registration, provided the state filing has been on file for the required period and no stop order has been issued.

Important Limitations

LimitationRule
Cannot Be Earlier Than SECState registration cannot be effective before federal registration
Price AmendmentIf price not in prospectus, must file price amendment
Administrator DelayAdministrator can postpone effectiveness

Price Amendment Requirement

If the offering price is not included in the SEC registration statement:

RequirementDetails
When RequiredIf prospectus doesn't contain price
TimingMust file within 2 business days of SEC pricing
ContentStatement of maximum/minimum offering price

State Review Process

Unlike qualification, coordination involves limited state review:

AspectCoordinationQualification
State ReviewLimited (relies on SEC review)Full state review
Document PreparationUse SEC documentsState-specific documents
Timing ControlTied to SECState determines

Administrator's Powers

Even with coordination, the Administrator can:

PowerDescription
Issue Stop OrdersDeny or suspend registration
Require Additional InformationRequest more disclosure
Impose ConditionsAdd requirements beyond SEC
Delay EffectivenessPostpone state registration

Practical Example

Scenario: ABC Corp files an S-1 registration statement with the SEC for an IPO. ABC plans to sell shares in 20 states.

Process:

  1. ABC files copies of S-1 with each of the 20 state Administrators
  2. ABC includes state-specific filing forms and fees
  3. SEC declares S-1 effective on March 15
  4. State registrations automatically become effective March 15 (assuming proper filings and no stop orders)

Key Takeaways

  • Coordination is for securities also registered with the SEC
  • Uses same documents filed with SEC
  • State registration becomes effective simultaneously with SEC
  • State registration cannot be effective before SEC registration
  • Administrator can still issue stop orders and impose conditions
  • Must file price amendment if price not in prospectus
Test Your Knowledge

Under registration by coordination, when does the state registration become effective?

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Test Your Knowledge

Can a state securities registration by coordination become effective before the SEC registration?

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Test Your Knowledge

If the offering price is not included in the SEC registration statement at the time of filing, what must the issuer do for state registration by coordination?

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D