Series 63 Blue Sky Law Cheat Sheet

📄 Series 63 Blue Sky Law Cheat Sheet

Blue Sky Laws are state-level securities regulations designed to protect investors against fraud. On the Series 63 Exam, understanding these laws is essential—especially how they apply to registration, exemptions, and the role of state administrators. This cheat sheet gives you a fast, focused overview of what you need to know.

🏛️ What Are Blue Sky Laws?

• 📍 State securities laws that govern the offer and sale of securities within each state
• 🛡️ Intended to protect investors from fraudulent or deceptive practices
• 🧾 Based on the Uniform Securities Act (USA), adopted in some form by most states

🔍 Key Concepts for the Exam

1. State Administrator

• Has jurisdiction over offers and sales made or accepted within the state
• Can investigate, subpoena, issue cease-and-desist orders, and deny or revoke registrations
• May cooperate with federal agencies, but enforces state-specific rules

2. Registration of Persons

• Broker-Dealers (BDs) and Agents must register in each state where they do business
• Investment Advisers (IAs) register at the state or federal level, not both
• Investment Adviser Representatives (IARs) register at the state level

3. Registration of Securities

There are three primary methods:

🧾 Common Exemptions

Exempt Securities

• U.S. government and municipal securities
• Canadian government and foreign national securities
• Commercial paper (<270 days)
• Bank-issued securities
• Federal covered securities (e.g., NYSE stocks, mutual funds)

Exempt Transactions

• Isolated non-issuer transactions
• Private placements (limited to accredited investors)
• Unsolicited brokerage transactions
• Transactions with financial institutions

⚖️ Prohibited Practices Under Blue Sky Laws

• ❌ Misrepresenting material facts
• ❌ Omitting key information
• ❌ Insider trading
• ❌ Excessive trading (churning)
• ❌ Unregistered person offering/selling securities

📝 Example Question

A broker-dealer located in State A solicits a client in State B. The trade is executed through a platform located in State C. Which state(s) have jurisdiction?

A. State A only
B. State B only
C. States A and B only
D. States A, B, and C

Correct Answer: D. States A, B, and C
Explanation: Jurisdiction exists in any state where the offer originates, is directed, or is accepted—including the place of execution.

🚀 Use This Cheat Sheet to Review Faster

This guide gives you the key Blue Sky Law concepts tested on the Series 63 Exam. Revisit it during your final review phase to sharpen your memory and boost your score.

👉 Download More Series 63 Exam Resources

Know the laws. Recognize the rules. Pass the Series 63.