Series 63 practice questionmediumInstitutional Transaction Definition
A broker-dealer sells unregistered securities to a bank. Under the USA, this transaction is:
- AExempt, because the sale is to an institutional buyer✓ Correct answer
- BNon-exempt, requiring registration of the security
- CNon-exempt, but exempt from antifraud provisions
- DExempt, but only if the security is federal covered
Explanation
Why A — Exempt, because the sale is to an institutional buyer
Transactions with institutional investors such as banks are exempt under USA Section 402(b)(8). The exemption does not depend on federal coverage, and antifraud provisions always apply.
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