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← Series 63: Regulation of Broker-Dealers & Agents
Series 63 practice questionmediumTricky Scenarios—Promissory Notes

A junior banker at William Blair solicits the sale of 8-month commercial paper (promissory notes) to 20 corporate treasurers. Which statement is MOST accurate under the USA?

  1. AShe is automatically exempt from agent registration because the note is short-term.
  2. BAgent registration is not required because she is representing an issuer and offering an exempt security.
  3. CAgent registration is required because she is soliciting non-institutional buyers.
  4. DAgent registration is not required only if the commercial paper meets all criteria under Sec. 402(a)(3).✓ Correct answer
Explanation

Why D — Agent registration is not required only if the commercial paper meets all criteria under Sec. 402(a)(3).

Commercial paper is only exempt if it matures in <9 months, is issued in denominations of $50,000+, and receives a high rating (Sec. 402(a)(3)). Otherwise, agent registration could be required when soliciting sales.

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