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← Series 63: Regulation of Securities & Issuers
Series 63 practice questioneasyExempt Securities — Federal Covered Securities

In a remedial practice session, the fact pattern is framed this way. Assume all filings and notices are evaluated under the USA. Which of the following is considered a federal covered security and therefore exempt from state registration?

  1. AA security issued by a startup in an intrastate offering
  2. BA security issued by a company with less than A security listed on the New York Stock Exchange million in assets
  3. CA private placement sold to only 5 investors in one state
  4. DA security listed on the New York Stock Exchange✓ Correct answer
Explanation

Why D — A security listed on the New York Stock Exchange

Under NSMIA and USA Section 102(6), securities listed on national exchanges such as the NYSE, NASDAQ, or American Stock Exchange are considered federal covered securities. These securities are exempt from state registration requirements, though states retain antifraud authority over them. State-law analysis leads to the same conclusion despite the alternate scenario.

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