Securities, Issuers, Registration, Exemptions and Remedies
This topic covers offer, sale, security, federal covered security, issuer, non-issuer, Howey, registration, exemptions, accredited investors, and administrator remedies.
How to study the Series 66
Treat the Series 66 as a dual-capacity exam: know the product, profile the client, then identify whether the person is acting as agent, adviser, or IAR.
Core concepts
Concept 1
Security, offer, sale, issuer, non-issuer, federal covered security, person, investment company, and accredited investor definitions must be applied precisely.
Exam cue: First decide whether the instrument and activity are securities-related.
Concept 2
State and federal securities registration, notice filing, exemptions, Regulation D, post-registration requirements, and state antifraud authority are key rules.
Exam cue: Separate exempt security from exempt transaction and remember antifraud.
Concept 3
Administrators can investigate, issue orders, discipline, and pursue remedies within statutory limits.
Exam cue: For remedies, distinguish administrative, civil, and criminal consequences.
Risk pitfalls and guardrails
Treating federal covered status as a full state-law escape.
Guardrail: Avoid answers that blur capacity, skip disclosure, ignore custody, or give unlimited administrator power.
Ignoring accredited investor facts in private offerings.
Guardrail: Avoid answers that blur capacity, skip disclosure, ignore custody, or give unlimited administrator power.
Giving the administrator unlimited power without process.
Guardrail: Avoid answers that blur capacity, skip disclosure, ignore custody, or give unlimited administrator power.
Memory anchors
Security
A security includes stocks, bonds, notes, investment contracts, and other listed instruments.
Howey Test
An investment contract involves investment of money, common enterprise, expectation of profit, and efforts of others.
Federal Covered Security
Federal covered status limits state registration but can allow notice filing.
Issuer
An issuer creates or distributes its own securities.
Non-Issuer
A non-issuer transaction does not involve issuer distribution.
Accredited Investor
Accredited investor status affects private offering exemptions.
Regulation D
Regulation D provides private offering exemptions under federal law.
State Antifraud
State antifraud authority remains even when registration is exempt.
Cease-and-Desist
A cease-and-desist order can stop violative conduct.
Civil Liability
Civil liability can include rescission, damages, interest, costs, or fees.
Checkpoint rule
Do the check-up only after you can summarize each concept in one sentence and identify one dangerous pitfall from memory.
Knowledge Check (after reading)
Short check-up to confirm understanding of this module.
Check-up Questions
A promoter offers interests in a scheme where investors put in money for a common enterprise expecting profits from others' efforts. Which test determines whether this is a security?
A state administrator distinguishes an exempt security from an exempt transaction. Which statement is accurate?
Answer all questions to submit.
Next step personalized recommendations
Continue learning
Move forward only after this module is stable.
What is Pass Harbor?
Completely free exam prep for 317 U.S. exams.
- Practice questions
- Flashcards
- Study guides
- Mock exams
- No registration
- No paywall
- Start instantly
“No more expensive exam prep. Quality study tools should be accessible to everyone.”