State Securities Law: California Registration Requirements: Covered Securities are Exempt Securities

The exemptions are found in Sections 25100, 25100.1 (NSMIA), 25101, 25101.1 (NSMIA), 25102, 25102.1 (NSMIA), and 25103 and are comprised of two groups, in the first group, the securities themselves are exempted from registration for as many transactions as you can ever do, and in the second group, which only applies to securities that are not in the first group, each transaction is exempted for all the securities one time and the restricted securities remain restricted after that transaction takes place.

By adding Section 25100.11, the State of California incorporates the concept of a federal "covered security" into the California law's creation of an additional type of exempt security in California (in the sense of exempt from requirements for qualification of securities in Section 25110, 25120 and 25130, not globally exempt from California securities laws, e.g., anti-fraud statutes).

1 25100.1.  The following securities are not subject to Sections
25110, 25120, and 25130:
   (a) A security defined as a "covered security" pursuant to Section
18(b)(1) of the Securities Act of 1933 (15 U.S.C. Sec. 77r).
   (b) A security issued by an investment company that is registered
or that has filed a registration statement under the Investment
Company Act of 1940 (15 U.S.C. Sec. 80a-1) and that is defined as a
"covered security" pursuant to Section 18(b)(2) of the Securities Act
of 1933, and all the following requirements are met:
   (1) Prior to any offer or sale in this state, there is filed with
or paid to the commissioner each of the following:
   (A) A notice consisting of all documents that are part of a
federal registration statement filed with the Securities and Exchange
Commission pursuant to the Securities Act of 1933 or, in lieu
thereof, a form prescribed by the commissioner, and that a consent to
service of process is either on file with the commissioner or is
attached to the notice.
   (B) As necessary to compute fees, a report of the value of
securities covered under this subdivision that are offered or sold in
this state.
   (C) The notice filing fee provided for in subdivision (a) of
Section 25608.1.
   (2) If any offer or sale is to be made pursuant to Section 18(b)
(2) of the Securities Act of 1933 and this subdivision more than 12
months after the date the notice was filed under this subdivision,
the issuer shall file another notice and pay the fee specified in
subparagraph (C) of paragraph (1).

The exemption and filing provisions of Section 25102.1(d) are relevant to Rule 506 offerings,  It exempts from the qualification requirements of Sections 25110, 25120 and 25130 a Rule 506 offering under the following conditions:

   (d) Any offer or sale of a security with respect to a transaction
that is exempt from registration under the Securities Act of 1933
pursuant to Section 18(b)(4)(E) of that act, if all of the following
requirements are met:
   (1) A notice in the form of a copy of the completed Form D (17
C.F.R. 239.500) filed with the Securities and Exchange Commission is
filed with the commissioner within 15 days of the first sale in this
state, along with documents filed with the Securities and Exchange
Commission in annual or periodic reports that the commissioner by
rule or order deems appropriate. The commissioner may allow for a
notice in the form of the electronic transmission of the information
in Form D.
   (2) A consent to service of process under Section 25165 is filed
with the notice as required by paragraph (1).
   (3) Payment of the notice filing fee provided for in subdivision
(c) of Section 25608.1 is made.
   (e) Notwithstanding the language of subdivisions (a), (b), (c),
and (d) of this section, an issuer may file an application for
qualification pursuant to Section 25111, 25112, 25113, 25121, 25131,
or 25142.