Series 63 practice questionmediumExempt Transactions — Isolated Non-Issuer Transactions
During a registration workshop, the instructor adds this setup first. Read it as a Uniform Securities Act issue rather than a federal-law issue. Mary sells shares she owns in a private company to her neighbor in a one-time transaction. Mary is not an issuer, underwriter, or dealer. This transaction is BEST described as:
- AA transaction requiring state registration
- BAn isolated non-issuer transaction, exempt from registration✓ Correct answer
- CA private placement requiring compliance with Regulation D
- DAn unsolicited brokerage transaction
Explanation
Why B — An isolated non-issuer transaction, exempt from registration
Under USA Section 402(b), an isolated non-issuer transaction is exempt from registration. Mary's one-time sale of her own shares to her neighbor meets all the criteria: it is isolated (not part of repeated transactions), and Mary is not the issuer, an underwriter, or a dealer. No registration is required for this occasional secondary market transaction. The governing USA principle is unchanged even though the framing is different.
Turn it into reps
Reading one answer is not the same as being ready
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