Series 63 practice questionmediumReg D—General Solicitation
An agent conducts a general advertising campaign in State Y for an offering that relies solely on the USA limited-offering exemption. The transaction is:
- AExempt if no more than 10 retail investors purchase
- BNot exempt, because general solicitation is not permitted✓ Correct answer
- CExempt if the issuer is a well-known seasoned issuer
- DExempt if all purchasers are institutional investors
Explanation
Why B — Not exempt, because general solicitation is not permitted
The USA limited-offering exemption applies to an offer directed to no more than 10 non-institutional persons in the state during 12 consecutive months and does not support a public advertising campaign. Rule 506(c) is a distinct federal exemption that can permit general solicitation under federal conditions.
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