Study guide
5.1 State Administrator Powers
Series 63 Uniform Securities Agent State Law
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1 Introduction
About the Series 63 Exam How to Use This Guide
2 Chapter 1: USA Definitions
1.1 Key Terms Overview 1.2 Definition of Person 1.3 Definition of Security 1.4 Offer and Sale 1.5 Exclusions from Definitions
3 Chapter 2: Registration of Persons
2.1 Broker-Dealer Registration 2.2 Broker-Dealer Exemptions and Exclusions 2.3 Agent Registration 2.4 Agent Exemptions and Exclusions 2.5 Investment Adviser and IAR Registration 2.6 IA and IAR Exemptions
4 Chapter 3: Registration of Securities
3.1 Registration Methods Overview 3.2 Registration by Coordination 3.3 Registration by Qualification 3.4 Registration by Filing (Notice Filing) 3.5 Exempt Securities and Transactions
5 Chapter 4: Fraudulent and Unethical Practices
4.1 Anti-Fraud Provisions 4.2 Prohibited Business Practices 4.3 Churning and Unauthorized Trading 4.4 Misrepresentation and Omissions 4.5 Market Manipulation 4.6 Insider Trading and Front-Running
6 Chapter 5: Administrative Provisions
5.1 State Administrator Powers 5.2 Investigations and Subpoenas 5.3 Administrative Orders 5.4 Cease and Desist and Injunctions 5.5 Criminal and Civil Penalties
5.1 State Administrator Powers
Key Takeaways Explain This Topic AI
The Administrator enforces the USA and protects investors.
Powers include rulemaking, licensing, and investigations.
The Administrator cannot impose jail time or create new law.
Actions must be in the public interest with due process.
Administrators coordinate with other states and federal regulators.
Last updated: January 2026
The State Administrator (sometimes called the securities commissioner or director) is the official responsible for enforcing the Uniform Securities Act (USA) in each state. Understanding the Administrator's powers and limitations is critical for the Series 63 exam.
Role of the State Administrator
The State Administrator is the primary regulator of securities activities within a state. Key responsibilities include:
- Enforcing the provisions of the USA
- Protecting investors from fraud and unfair practices
- Registering securities, broker-dealers, agents, investment advisers, and IARs
- Investigating potential violations
- Taking enforcement actions when necessary
Exam Tip : The Administrator's most important role is enforcing the anti-fraud provisions of the USA. Protecting investors from fraud is their highest priority.
- Powers of the Administrator
- Regulatory Powers
- Power Description
- Rule-making May make, amend, and rescind rules to carry out the provisions of the USA
- Licensing May grant, deny, suspend, cancel, or revoke registrations
- Exemptions May grant exemptions or withdraw exemptions from registration
- Forms May require specific forms for registration applications
- Fees May set reasonable fees for registration and filings
- Enforcement Powers
- Power Description
- Investigations May investigate violations in any state
- Subpoenas May issue subpoenas for persons, books, and records
- Cease and desist May issue cease and desist orders without prior hearing
- Court action May seek injunctions, restraining orders, and receivers
- Criminal referral May refer cases for criminal prosecution
- Limitations on Administrator Powers
The Administrator has significant authority but also has important limitations:
What the Administrator CANNOT Do
Make new law - The Administrator interprets and enforces existing law but cannot create new statutes (only the legislature can do that)
- Impose jail time - Only courts can impose criminal penalties including imprisonment
- Violate constitutional rights - Must respect 5th Amendment rights against self-incrimination
- Act arbitrarily - Must act in the public interest and follow due process
Key Point : The Administrator enforces the law but does not make it. The USA was created by legislators, and the Administrator interprets and enforces its provisions.
Public Interest Standard
The Administrator must find that taking action is in the public interest before taking enforcement actions. Factors considered include:
- Protection of investors
- Prevention of fraud
- Maintenance of fair and honest markets
- Severity of the violation
- History of prior violations
- Delegation of Powers
The Administrator may delegate certain powers to designated officers or employees, but some powers typically cannot be delegated, such as:
- Issuing final orders
- Making rules
- Conducting adjudicatory hearings
- Interstate Cooperation
State Administrators cooperate with each other and with federal regulators:
- Cooperation Type Description
- Information sharing May share investigation information with other states
- Joint investigations May conduct investigations with other jurisdictions
- Reciprocal enforcement Honor orders from other state administrators
- Federal coordination Work with SEC and FINRA on overlapping matters
Exam Alert : The Administrator may investigate and take action regarding violations occurring in other states if the conduct affects investors in the Administrator's state.
Filing Requirements and Records
The Administrator may require:
- Filing of registration applications and amendments
- Maintenance of specific books and records
- Periodic reports and financial statements
- Notification of material changes in business
- Record Retention
Securities professionals must maintain required records for the period specified by the Administrator. These records must be made available for inspection upon request.
- Key Takeaways
- The Administrator is the state official responsible for enforcing the USA
- Primary role is protecting investors through anti-fraud enforcement
- Has broad powers including rule-making, licensing, investigations, and enforcement
- Cannot make new laws (only interpret and enforce existing law)
- Cannot impose jail time (only courts can do this)
- Must act in the public interest
- May cooperate with other states and federal regulators
- Can investigate violations occurring in other states