Uniform Securities Act
The Uniform Securities Act (USA) serves as model legislation for state securities regulation. Developed by the Uniform Law Commission with input from NASAA, most states have adopted some version of this act to govern securities activities within their borders.
Purpose and Framework
The USA provides a comprehensive framework for:
| Function | Description |
|---|---|
| Securities Registration | Methods for registering securities for sale |
| Person Registration | Registration of broker-dealers, agents, IAs, and IARs |
| Antifraud Provisions | Prohibitions against fraud and manipulation |
| Administrative Enforcement | Powers granted to state administrators |
Three-Part Registration System
The USA requires registration in three categories:
1. Securities
| Requirement | Details |
|---|---|
| General Rule | Securities must be registered unless exempt |
| Registration Methods | Coordination, Qualification, Notice Filing |
| Duration | Generally 1 year from effective date |
| Renewal | Annual renewal required |
2. Persons
| Category | Registration Requirement |
|---|---|
| Broker-Dealers | Must register in each state where doing business |
| Agents | Must register with states where they operate |
| Investment Advisers | SEC or state registration required |
| IARs | Must register at state level |
3. Transactions
| Requirement | Details |
|---|---|
| Exempt Transactions | Some transactions exempt from registration |
| Antifraud Applies | Exemption does NOT protect from fraud laws |
| Transaction-Specific | Exemption applies to that transaction only |
State Administrator Powers
The state securities administrator has broad authority to enforce the USA within their jurisdiction.
Rulemaking Authority
| Power | Scope |
|---|---|
| Adopt Rules | Consistent with the Act |
| Issue Interpretive Opinions | Guidance on Act provisions |
| Set Requirements | Registration standards and procedures |
| Grant Exemptions | May create additional exemptions |
Investigative Authority
| Power | Details |
|---|---|
| Subpoena Power | Compel production of documents and witnesses |
| Examine Records | Inspect books and records |
| Administer Oaths | Take sworn testimony |
| Cross-Border Authority | May investigate in any state |
| Fifth Amendment | Cannot compel self-incriminating testimony |
Enforcement Authority
| Action | Description |
|---|---|
| Deny Registration | Refuse initial registration |
| Suspend Registration | Temporarily halt registration |
| Revoke Registration | Permanently remove registration |
| Issue Stop Orders | Halt securities offerings |
| Cease and Desist Orders | Can issue without prior hearing |
| Civil Penalties | Impose fines |
| Criminal Referral | Refer matters to attorney general |
On the Exam: The administrator can issue cease and desist orders without prior notice or hearing. However, a hearing must be provided upon request (typically within 15 days).
Delegation of Powers
| Can Delegate | Cannot Delegate |
|---|---|
| Serving subpoenas | Granting registration exemptions |
| Administrative functions | Issuing cease and desist orders |
| Conducting investigations | Final enforcement decisions |
Registration Effective Dates
General Rule
| Timing | Details |
|---|---|
| Standard | Effective at noon on the 30th day after filing |
| Early Effectiveness | Administrator may grant earlier date |
| Stop Order | Administrator may delay or deny |
Federal Covered Securities
| Requirement | Details |
|---|---|
| No State Registration | Exempt from full registration |
| Notice Filing | State may require notice and fee |
| Antifraud | Still subject to state antifraud laws |
Consent to Service of Process
All registrants must file a consent to service of process:
| Requirement | Purpose |
|---|---|
| Irrevocable Consent | Designates administrator as agent for service |
| Legal Actions | Allows lawsuits to be filed in state |
| Out-of-State Parties | Provides jurisdiction over non-residents |
Key Takeaways
- The USA is model legislation—each state may modify it
- Three-part system: securities, persons, and transactions
- Administrator has broad powers: rulemaking, investigation, enforcement
- Can issue cease and desist without prior hearing
- Cannot compel self-incriminating testimony (5th Amendment)
- Standard registration: effective at noon on day 30 after filing
Under the Uniform Securities Act, a state administrator can issue a cease and desist order:
The state administrator has subpoena power that:
Under the USA, securities registration becomes effective:
16.2 Securities Registration Methods
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