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← Series 63: Regulation of Securities & Issuers
Series 63 practice questionmediumExempt Transactions — Isolated Non-Issuer Transactions

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:

  1. AA transaction requiring state registration
  2. BAn isolated non-issuer transaction, exempt from registration✓ Correct answer
  3. CA private placement requiring compliance with Regulation D
  4. 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.

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