A closed-end investment company that is NOT registered under the Investment Company Act of 1940 offers its shares in a state. How are these shares treated under state securities law?

1. AThey are automatically exempt as investment company securities
2. BThey are federal covered securities subject to notice filing only
3. CThey must be registered with the state because they do not qualify as federal covered securities✓ Correct answer
4. DThey are exempt if the company has been operating for at least three years

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