Registration by Coordination
Registration by coordination is the most common method for registering securities that are also being registered with the SEC. It allows issuers to "coordinate" state registration with their federal registration, using essentially the same documents.
When Coordination Is Used
Registration by coordination is appropriate when:
| Situation | Use Coordination? |
|---|---|
| IPO being sold in multiple states | Yes |
| Follow-on offering with SEC registration | Yes |
| Securities registered with SEC under 1933 Act | Yes |
| Intrastate offering (one state only) | No—use qualification |
| Federal covered securities | No—use notice filing |
Key Rule: Coordination is used whenever the issuer is also filing a registration statement with the SEC under the Securities Act of 1933 in connection with the same offering.
Filing Requirements
Documents Required
To register by coordination, the issuer must file:
| Document | Description |
|---|---|
| Copies of SEC Documents | Prospectus, registration statement, amendments |
| State Filing Form | Uniform form or state-specific application |
| Consent to Service of Process | Appoints Administrator as agent |
| Filing Fee | State-determined amount |
Information That Must Be Provided
| Information | Details |
|---|---|
| Amount of Securities | Total being registered in the state |
| Adverse Orders | Any stop orders from other states |
| Federal Effectiveness | Anticipated date of SEC effectiveness |
| Selling Agents | List of broker-dealers participating |
Simplicity: The coordination process is designed to minimize duplication—the issuer uses the same documents filed with the SEC rather than preparing separate state documents.
Amendments
The issuer must file amendments with the state when:
| Event | Requirement |
|---|---|
| SEC Amendment | File copy with state promptly |
| Material Change | Amend state registration |
| Change in Offering | Update state filing |
Effective Date of Registration
This is the most tested aspect of coordination:
Automatic Effectiveness
Registration by coordination becomes effective automatically when:
| Condition | Requirement |
|---|---|
| SEC Effectiveness | Federal registration must be effective |
| No Stop Order | Administrator hasn't issued stop order |
| Filing Duration | State filing on file for specified period |
The Timing Rule
| Situation | When State Registration Becomes Effective |
|---|---|
| Standard Rule | Simultaneously with SEC effectiveness |
| Required Filing Period | State filing must be on file for specified days before SEC effective date |
| Administrator Action | Administrator may accelerate or delay |
Exam Tip: Registration by coordination becomes effective at the same time as the federal (SEC) registration, provided the state filing has been on file for the required period and no stop order has been issued.
Important Limitations
| Limitation | Rule |
|---|---|
| Cannot Be Earlier Than SEC | State registration cannot be effective before federal registration |
| Price Amendment | If price not in prospectus, must file price amendment |
| Administrator Delay | Administrator can postpone effectiveness |
Price Amendment Requirement
If the offering price is not included in the SEC registration statement:
| Requirement | Details |
|---|---|
| When Required | If prospectus doesn't contain price |
| Timing | Must file within 2 business days of SEC pricing |
| Content | Statement of maximum/minimum offering price |
State Review Process
Unlike qualification, coordination involves limited state review:
| Aspect | Coordination | Qualification |
|---|---|---|
| State Review | Limited (relies on SEC review) | Full state review |
| Document Preparation | Use SEC documents | State-specific documents |
| Timing Control | Tied to SEC | State determines |
Administrator's Powers
Even with coordination, the Administrator can:
| Power | Description |
|---|---|
| Issue Stop Orders | Deny or suspend registration |
| Require Additional Information | Request more disclosure |
| Impose Conditions | Add requirements beyond SEC |
| Delay Effectiveness | Postpone state registration |
Practical Example
Scenario: ABC Corp files an S-1 registration statement with the SEC for an IPO. ABC plans to sell shares in 20 states.
Process:
- ABC files copies of S-1 with each of the 20 state Administrators
- ABC includes state-specific filing forms and fees
- SEC declares S-1 effective on March 15
- State registrations automatically become effective March 15 (assuming proper filings and no stop orders)
Key Takeaways
- Coordination is for securities also registered with the SEC
- Uses same documents filed with SEC
- State registration becomes effective simultaneously with SEC
- State registration cannot be effective before SEC registration
- Administrator can still issue stop orders and impose conditions
- Must file price amendment if price not in prospectus
Under registration by coordination, when does the state registration become effective?
Can a state securities registration by coordination become effective before the SEC registration?
If the offering price is not included in the SEC registration statement at the time of filing, what must the issuer do for state registration by coordination?
3.3 Registration by Qualification
Continue learning