Practice Quiz

FINRA Series 63 (NASAA)

Category - Series 63

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A variable annuity is:
  1. not a security and, therefore, does not have to be registered with the state.
  2. not a security, but is still required to be registered with the state before it can be offered for sale.
  3. a security and, therefore, has to be registered with the state before it can be offered for sale.
  4. a security, but is exempt from state registration.
Explanation
Answer: D - A variable annuity is defined as a security, but is exempt from state registration in the opinion of the North American Securities Administrators Association (NASAA.) The Supreme Court of the U.S. passed a ruling that deemed a variable annuity to be a security. The National Securities Market Improvement Act of 1996 (NSMIA) established variable annuities to be federal covered securities, however, since they are, for all intents and purposes, mutual funds. Federal covered securities are exempt from state registration.
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