Series 63 practice questionhardPrivate Placement—General Solicitation
A State X registered agent emails a private placement offer to a list of 15 non-institutional prospects obtained from a trade show attendee list. Under the USA, this transaction is:
- AExempt because no commissions are paid to agents
- BNot exempt, because the offer was made to more than 10 non-institutional investors✓ Correct answer
- CExempt because trade show attendees are considered institutional investors
- DExempt if fewer than 10 offerees accept the offer
Explanation
Why B — Not exempt, because the offer was made to more than 10 non-institutional investors
The exemption is based on the number of offers made to non-institutional investors (not sales), and the limit is 10 (USA 402(b)(9)). The use of a trade show list does not change the nature of offerees.
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