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Frequently Asked Questions
about Securities

View the list of Frequently Asked Questions!



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Q:  What is a covered security? 

 
Generally, when you offer or sell a security, you must comply with the registration requirements of both state and federal securities laws.  In 1996, Congress decided that certain securities should only have to comply with federal registration laws. Congress enacted what is commonly referred to as NSMIA—the National Securities Markets Improvement Act of 1996.  In NSMIA, Congress preempted specified state registration requirements.
 
In other words, state registration requirements do not apply to the securities Congress listed in section 18 of the Securities Act of 1933.  Those listed securities commonly are referred to as “covered securities.” In rule 146, the Securities and Exchange Commission added to the list of covered securities.
 
Covered securities include: 
  • Securities listed on the New York Stock Exchange, the American Stock Exchange, the NASDAQ Capital Market, Tier I of the NYSE Arca, Tier I of the Philadelphia Stock Exchange, the Chicago Board Options Exchange, and options listed on the International Securities Exchange
     
  • Securities issued by SEC-registered investment companies (e.g. mutual funds)
     
  • Securities issued in compliance with rule 506 of federal Regulation D 

     

Arizona law requires that sales of some of the covered securities be reported to the Corporation Commission through notice filings. See A.R.S. § 44-1843.02, § 44-3321, and § 44-3325. Arizona law requires registration of persons offering and selling covered securities in or from Arizona. See A.R.S. § 44-1843.02(D).

 


The information provided on this website is not comprehensive, is not offered as legal advice, and is not a substitute for competent legal counsel.  The Securities Division provides this information to give you an overview of the topics discussed.   You should not rely on the accuracy of this information, but should carefully review all applicable statutes and regulations with the assistance of legal counsel.