NASAA Series 66

Under the Uniform Securities Act, what is the correct order of registration for a security using the coordination method?

1. AThe state Administrator is required to personally conduct a full merit review and certify in writing that the offering price is fair and equitable before any coordinated sale may proceed
2. BThe security is registered solely at the state level under a self-contained state filing, and no registration statement is ever filed with the SEC under the Securities Act of 1933
3. CRegistration becomes effective the very instant the application is delivered to the Administrator's office, with no coordination whatsoever with the federal registration statement's effective date
4. DA federal registration statement under the Securities Act of 1933 is filed simultaneously with the state, and state effectiveness is coordinated with the SECCorrect

Why: Registration by coordination is used when a security is registered federally under the Securities Act of 1933 at the same time as the state filing. State effectiveness is timed to coincide with SEC effectiveness. The Administrator never passes on the merits of an offering.Uniform Securities Act

A client withdraws funds from a traditional IRA before age 59.5 without qualifying for an exception. The tax consequence is generally:

1. ACapital gains tax at 15%, with no early withdrawal penalty
2. BOrdinary income tax plus a 10% early withdrawal penaltyCorrect
3. COrdinary income tax plus a 20% early withdrawal penalty
4. DA 10% penalty only, with no income tax on the amount withdrawn

Why: A distribution from a traditional IRA before age 59 and a half is generally taxed as ordinary income, and Internal Revenue Code Section 72(t) adds a 10% additional tax unless an exception applies, such as certain medical costs or a first-home purchase within the limit. Withdrawals are not taxed at capital gains rates, the additional tax is 10% rather than 20%, and income tax is still due because the contributions were generally deductible.Internal Revenue Code Sec. 72(t)