NASAA Series 63Regulation of Securities and IssuersEasy
Which of the following securities is exempt from the registration requirements of the Uniform Securities Act?
- AA bond issued by a foreign corporation listed only on a foreign exchange
- BA limited partnership interest in a real estate syndication
- CCommon stock of a small local manufacturing company
- DA bond issued by a U.S. municipality
Show answer & explanationAnswer & explanation
Correct answer: D. A bond issued by a U.S. municipality
Securities issued by U.S. government entities, including states, counties, and municipalities, are exempt securities under the Uniform Securities Act. The other choices do not qualify for any statutory exemption.
Why the other options are wrong
- A. Foreign securities not listed on a qualifying U.S. exchange are not automatically exempt.
- B. Real estate limited partnerships are not exempt securities.
- C. Ordinary corporate common stock has no exemption absent other qualifying factors.
Exempt Securities
Certain securities are exempt from state registration requirements, including those issued by governments, banks, and municipalities.
- U.S. and Canadian government/municipal securities are exempt
- Bank and savings institution securities are exempt
- Exemption applies to the security itself, not necessarily the transaction
Memory trick: Government bonds get a free pass from registration