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Covers criminal penalties for willful violations using the 5-5-3 rule, including statute of limitations, maximum fine, and maximum jail sentence. Summarizes federal covered advisers SEC registration triggers by AUM thresholds and multi-state adviser rules, custody definitions and adviser requirements, offers and sales treatment, civil liabilities for unknowingly violating the law, and federal covered securities and exemptions. Includes how to register securities in a state via notice filing or state registration distinctions.",{"@graph":69,"@context":123},[70,84,106],{"@type":71,"itemListElement":72},"BreadcrumbList",[73,77,79,82],{"item":74,"name":75,"@type":76,"position":8},"https://docshare.wps.com","Home","ListItem",{"item":78,"name":9,"@type":76,"position":14},"https://docshare.wps.com/document/",{"item":80,"name":20,"@type":76,"position":81},"https://docshare.wps.com/document/exam/",3,{"item":83,"name":65,"@type":76,"position":19},"https://docshare.wps.com/document/nasaa-series-63-65-66-dump-sheet-state-laws-and-regulations-criminal-penalties-5-5-3-rule/389836/",{"url":83,"name":65,"@type":85,"image":86,"author":91,"headline":65,"publisher":94,"fileFormat":97,"inLanguage":63,"description":67,"dateModified":98,"datePublished":99,"encodingFormat":97,"isAccessibleForFree":100,"interactionStatistic":101},"DigitalDocument",{"url":87,"@type":88,"width":89,"height":90},"https://docshare.wps.com/thumbnails/nasaa-series-63-65-66-dump-sheet-state-laws-and-regulations-criminal-penalties-5-5-3-rule/389836.png","ImageObject",300,407,{"name":92,"@type":93},"Jacob","Person",{"url":74,"name":95,"@type":96},"DocShare","Organization","application/pdf","2026-10-28","2026-09-25",true,{"@type":102,"interactionType":103,"userInteractionCount":105},"InteractionCounter",{"@type":104},"ViewAction",12,{"@type":107,"mainEntity":108},"FAQPage",[109,115,119],{"name":110,"@type":111,"acceptedAnswer":112},"What does the 5-5-3 rule specify for criminal penalties under the willful violation standard?","Question",{"text":113,"@type":114},"It states a 5-year statute of limitations, a $5,000 maximum fine per violation, and a 3-year maximum jail sentence.","Answer",{"name":116,"@type":111,"acceptedAnswer":117},"When must an adviser register with the SEC under the federal covered adviser rules?",{"text":118,"@type":114},"An adviser must register with the SEC if it has $110 million+ in AUM, advises registered investment companies, or meets the specified SEC-covered criteria.",{"name":120,"@type":111,"acceptedAnswer":121},"How is custody defined, and what core adviser requirements apply?",{"text":122,"@type":114},"Custody includes holding client funds or securities, retaining funds received by mistake more than 3 business days, or having authority to withdraw from a client’s account. Requirements include confirming state allowance, notifying via Form ADV, using a qualified custodian, providing quarterly statements, conducting an annual surprise audit on Form ADV-E, and meeting minimum net worth thresholds.","https://schema.org",{"og:url":83,"og:type":125,"og:title":65,"og:site_name":95,"og:description":67},"article",{"robots":127,"canonical":83},"index,follow",{"doc_id":129,"site_id":62},389836,1790624817,{"code":4,"msg":5,"data":132},{"doc_id":129,"user_id":133,"nickname":92,"user_avatar":134,"doc_module":4,"category_id":19,"category_name":20,"doc_title":65,"doc_description":67,"doc_content":135,"file_id":136,"file_url":137,"file_type":138,"file_size":139,"view_count":105,"is_deleted":4,"is_public":8,"is_downloadable":8,"audit_status":8,"page_count":8,"language":140,"language_code":63,"site_id":62,"html_lang":63,"table_of_contents":141,"faqs":142,"seo_title":143,"seo_description":67,"update_tm":144,"read_time":81,"preview_page_count":4},962084931830,"https://ap-avatar.wpscdn.com/davatar_a8503ba1806abce46bf441b54a3ca4cd","NASAA SERIES 63 / 65 / 66 DUMP SHEET State laws and regulations  \nCriminal penalties (5-5-3 rule)  \n\n|  Penalties if willfully violating the law (per violation):\u003Cbr>• 5-year statute of limitations\u003Cbr>• $5,000 maximum ﬁne\u003Cbr>• 3-year maximum jail sentence |  |\n| --- | --- |\n\nFederal covered advisers  \n\n|  Eligible for SEC registration:\u003Cbr>• $100–$110 million AUM\u003Cbr>• Registered in 15 or more states (multi-state adviser rule)\u003Cbr> Must register with the SEC:\u003Cbr>• More than $110 million AUM\u003Cbr>• Advisers to registered investment companies\u003Cbr> Must withdraw (return to state registration):\u003Cbr>• AUM falls below $90 million |  |\n| --- | --- |\n\nCustody  \n\n|  Custody means:\u003Cbr>• Holding client funds or securities\u003Cbr>• Keeping client funds received by mistake more than 3 business days\u003Cbr>• Authority to withdraw from a client’s account  Requirements for investment advisers:\u003Cbr>• Conﬁrm the state allows custody\u003Cbr>• Notify the state administrator on Form ADV\u003Cbr>• Place assets with a qualiﬁed custodian\u003Cbr>• Send quarterly statements\u003Cbr>• Annual surprise audit (ﬁled on Form ADV-E)\u003Cbr>• $35,000 minimum net worth (vs. $10,000 for discretion) |  |\n| --- | --- |\n\nOffers & sales  \n\n|  Oﬀer: attempt to dispose of, or solicitation of an oﬀer to buy, a security for value\u003Cbr> Sale: contract of sale of, contract to sell, or disposition of, a security for value\u003Cbr> Considered oﬀers and/or sales:\u003Cbr>• Bonus oﬀer of securities\u003Cbr>• Gift of assessable stock\u003Cbr>• Warrants, rights, derivatives, and convertibles\u003Cbr> Not considered oﬀers or sales:\u003Cbr>• Bona ﬁde pledges or loans • Stock dividends\u003Cbr>• Corporate actions • Gift of non-assessable stock |  |\n| --- | --- |\n\nCivil liabilities  \n Liabilities if unknowingly violating the law:  \n• 3-year statute of limitations  \n• No later than 2 years after discovery  \n Right of rescission: written oﬀer to buy the security back  \n• At the original cost, plus interest & legal fees, minus income received  \n• Client has 30 days to accept or reject  \nFederal covered securities  \n Regulated by the SEC, exempt from state registration:  \n• Exchange-listed securities (and equal or senior securities of the same issuer)  \n• Investment company securities  \n• Rule 506 (Regulation D) private placements  \n• Certain federally exempt securities (US government, out-ofstate municipal)  \nSecurities exemptions  \n\n|  Exempt securities: government (US, Canadian, national foreign) , bank, insurance, common carrier & utility, federal covered, non-proﬁt, promissory notes, employee beneﬁt plans\u003Cbr> Exempt transactions:\u003Cbr>• Private placements (oﬀers to 10 or fewer retail investors in 12 months)\u003Cbr>• Isolated non-issuer transactions\u003Cbr>• Unsolicited non-issuer transactions\u003Cbr>• Certain ﬁduciary transactions (executor, sheriﬀ, bankruptcy trustee, guardian, conservator)\u003Cbr>• Debt-related transactions (bona ﬁde pledges and loans)\u003Cbr>• Transactions between issuers and underwriters\u003Cbr>• Institutional transactions\u003Cbr>• Oﬀer of pre-organization certiﬁcates (10 or fewer subscribers, no payments) |  |\n| --- | --- |\n\nRegistering securities in a state  \n Notice ﬁling: federal covered securities only; not a state registration (easiest)  \n Coordination: SEC and state registration at once; interstate securities that aren’t federal covered  \n Qualiﬁcation: state registration only (SEC exempt); intrastate securities (hardest)  \n[achievable.me](achievable.me)","cbCaifG63SNdMNLl","https://ap.wps.com/l/cbCaifG63SNdMNLl","pdf",107885,"English","# Criminal penalties (5-5-3 rule)\n# Federal covered advisers\n# Custody\n# Offers & sales\n# Civil liabilities\n# Federal covered securities and securities exemptions\n# Registering securities in a state","[{\"question\":\"What does the 5-5-3 rule specify for criminal penalties under the willful violation standard?\",\"answer\":\"It states a 5-year statute of limitations, a $5,000 maximum fine per violation, and a 3-year maximum jail sentence.\"},{\"question\":\"When must an adviser register with the SEC under the federal covered adviser rules?\",\"answer\":\"An adviser must register with the SEC if it has $110 million+ in AUM, advises registered investment companies, or meets the specified SEC-covered criteria.\"},{\"question\":\"How is custody defined, and what core adviser requirements apply?\",\"answer\":\"Custody includes holding client funds or securities, retaining funds received by mistake more than 3 business days, or having authority to withdraw from a client’s account. Requirements include confirming state allowance, notifying via Form ADV, using a qualified custodian, providing quarterly statements, conducting an annual surprise audit on Form ADV-E, and meeting minimum net worth thresholds.\"}]","NASAA Series 63 / 65 / 66 Dump Sheet - State Laws and Regulations - Criminal Penalties (5-5-3 rule) | PDF",1790327945]