Series 63 practice questionmediumPrivate placement – counting rules for entities
A private placement in State Q is offered to five pension funds and six individuals. For exemption purposes, how many purchasers are counted under USA rules?
- A11, because every entity and individual is counted separately
- B6, because institutional investors are not counted✓ Correct answer
- C5, because only the institutional investors count
- D1, if all pension funds are managed by the same fiduciary
Explanation
Why B — 6, because institutional investors are not counted
Institutional investors (like pension funds) are excluded from the 10-purchaser limit; only the six individuals count. Wrong answers ignore this exclusion (USA 402(b)(9)).
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