Lucky the Banker mascotLTB
← Series 63: Regulation of Securities & Issuers
Series 63 practice questionmediumExempt Transactions — Private Placements

Under the Uniform Securities Act, a private placement (limited offering) exemption generally requires that:

  1. AThe securities be offered to no more than a specified number of persons during a 12-month period, no general solicitation is used, and no commissions are paid to non-registered persons✓ Correct answer
  2. BAll purchasers be accredited investors under Regulation D
  3. CThe securities be listed on a national exchange
  4. DThe issuer file a full registration statement with the state
Explanation

Why A — The securities be offered to no more than a specified number of persons during a 12-month period, no general solicitation is used, and no commissions are paid to non-registered persons

Under USA Section 402(b), the private placement or limited offering exemption requires that securities be offered to a limited number of persons (typically 10 or fewer) during a 12-consecutive-month period, the seller reasonably believes all buyers are purchasing for investment, no general solicitation or advertising is used, and no commissions are paid for soliciting non-institutional purchasers.

Turn it into reps

Reading one answer is not the same as being ready

Lucky the Banker is a free practice app with 1,051+ Series 63 questions, weak-area tracking, and timed mock exams. No credit card, no paywall.

Practice Series 63 freeSeries 63 exam guide

Spot an error in this question or explanation? Tell us — we fix these fast.

Related Regulation of Securities & Issuers questions