Series 63 practice questionmediumdistinguishing exempt issuers vs exempt securities
A junior banker is unsure whether an offering by the Federal Home Loan Bank is exempt from state registration. Which is correct under the USA?
- AIt is exempt because the issuer is a federal agency listed in the USA.✓ Correct answer
- BIt is exempt only if the issuer applies for exemption in each state.
- CIt is not exempt because it is not a state or municipal government.
- DIt is not exempt unless the security is rated investment grade.
Explanation
Why A — It is exempt because the issuer is a federal agency listed in the USA.
Securities issued or guaranteed by U.S. federal agencies (like the FHLB) are exempt (USA 402(a)(1)), no application required. Investment grade is not relevant for exemption.
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