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← Series 63: Regulation of Securities & Issuers
Series 63 practice questionmediumExempt Securities — Bank Securities

A bank holding company that is not itself a bank issues common stock to raise capital. Is this security exempt from state registration?

  1. AYes, because it is associated with a bank
  2. BYes, because all financial institution securities are exempt
  3. CNo, because the exemption applies to securities issued by banks, not bank holding companies✓ Correct answer
  4. DNo, unless the holding company is listed on a national exchange
Explanation

Why C — No, because the exemption applies to securities issued by banks, not bank holding companies

Under USA Section 401, the exemption for bank-issued securities applies specifically to securities issued by banks, savings institutions, and trust companies, not to their parent holding companies. A bank holding company is a separate legal entity, and its securities must be registered unless another exemption applies, such as being listed on a national exchange.

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