Series 63 practice questionhardExempt Securities - Foreign Municipal Bonds
An agent is asked whether bonds issued by a municipality in France are exempt under the USA. Which statement is TRUE?
- AThey are not exempt; only foreign national government securities qualify✓ Correct answer
- BThey are exempt if the municipality is recognized by the SEC
- CThey are exempt only if the bonds are rated investment grade
- DThey are exempt as long as the bonds are not publicly offered
Explanation
Why A — They are not exempt; only foreign national government securities qualify
The USA (Section 402(a)(4)) exempts only securities issued by foreign national governments, not their subdivisions or municipalities.
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