Series 63 practice questionmediummunicipal bond nuances - home state vs other state
A banker in State X underwrites revenue bonds for a city in State Y. Under the USA, which of the following is TRUE regarding exemption in State X?
- AThe bonds are exempt in State X only if State Y first files a notice
- BThe bonds are not exempt in State X because the issuer is not State X or its political subdivisions.
- CThe bonds are exempt in State X even though the issuer is in another state.✓ Correct answer
- DThe bonds require registration in State X because they are revenue, not general obligation bonds.
Explanation
Why C — The bonds are exempt in State X even though the issuer is in another state.
Revenue bonds issued by a U.S. city are exempt securities under the USA in every state; the fact that the issuer is in another state does not remove the exemption. Revenue versus general-obligation status does not change this result.
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