Series 63 Study Guide

Series 63 Exam - Mastering Exempt Transactions

Exempt Transactions

Sometimes a security that would otherwise have to register is exempt from state registration because of the type of transaction that is involved. The following are all exempt transactions:

Private Placements/Regulation D Offerings

A private placement is a sale of securities that is made to a group of accredited investors and the securities are not offered to the general public. Accredited investors include institutional investors and individuals who:

Series 63 Exam - Mastering The Uniform Securities Act

Introduction

The state securities administrator has the authority to enforce all of the provisions of the Uniform Securities Act (USA) within their state. The state securities administrator may deny, revoke, or suspend the registration of a security, an agent, or a firm. The administrator may also revoke an exemption from registration, subpoena and investigate any registrant, and amend rules as required. The North American Securities Administrators Association or NASAA is the oldest investor protection organization in the country and represents the interest of all of the state securities administrators. NASAA also writes policies and administers the Series 63, 65, and 66 exams.

Series 63 Exam - Understanding Registration

Registration of Broker Dealers

Prior to conducting business in any state, a broker dealer must be properly registered or exempt from registration in that state. The first test when deciding if the broker dealer must register is determining if the firm has an office in the state. If the firm maintains an office within the state it must register with that state. An agent must register in their state of residence even if their firm is located in another state.

Example:
An agent who lives in New Jersey and who commutes to their office in New York must register in both New Jersey and New York.

Series 63 Exam - Understanding Securities Registration

All securities that are sold to a state residence must either be:

• Duly registered; or,
• Exempt from registration; or,
• Sold through an exemption transaction

Exempt Securities

Exempt securities are exempt from the registration requirements of The Securities Act of 1933. Exempt securities are not exempt from the antifraud provisions of the USA. Exempt securities are: