Series 63 practice questioneasyfederal covered vs state exemptions
Which security is federally covered and therefore NOT subject to state registration, even if it would otherwise lack a state exemption?
- AA municipal bond issued by a city in another state
- BA security listed on the NYSE✓ Correct answer
- CA corporate bond sold exclusively to institutional investors
- DA small business private placement under Rule 504
Explanation
Why B — A security listed on the NYSE
Securities listed on a national exchange (like the NYSE) are federally covered and preempt state registration (USA 402(b)(1)), regardless of whether they meet state-level exemptions. Municipal bonds of other states aren't always federally covered.
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