Exempt Transaction is a transaction where the securities that are being exchanged are not subject to state registration.
Applying "Exempt Transaction" to Securities Exams:
An exempt transaction is a transaction in a security that would, under ordinary circumstances, need state level registration. But, because of the unique way it is being transacted, the securities do not need to be registered at the state level. Some examples of exempt transactions are: transactions conducted by fiduciaries; unsolicited orders; transactions in mortgage backed securities; private placements (Reg D offerings) and isolated non-issuer transactions.