Series 63 practice questionhardExempt Securities - Exchange-Listed Security and Non-Listed Subsidiary
A parent company is listed on the NYSE, and its subsidiary issues its own stock to investors in State R. Under the USA, the subsidiary’s shares are:
- ANot exempt unless the subsidiary is also listed on a national exchange✓ Correct answer
- BExempt as a federal covered security due to its parent’s status
- CAutomatically exempt if the parent owns more than 50% of the subsidiary
- DExempt if sold only in isolated transactions
Explanation
Why A — Not exempt unless the subsidiary is also listed on a national exchange
Only securities actually listed on a national exchange (or qualifying under NSMIA) are exempt; subsidiary shares are not exempt just because the parent is listed (USA Section 402(a)(13)).
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