Series 63 practice questioneasyExempt Securities — Federal Covered Securities
Which of the following is considered a federal covered security and therefore exempt from state registration?
- AA security issued by a startup in an intrastate offering
- BA security issued by a company with less than $1 million in assets
- CA private placement sold to only 5 investors in one state
- 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.
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