Series 7 Exam Question 3: Answer and Explanation

Question: 3

A Regulation D offering is an offering of

• A. securities only within the issuer's home state
• B. securities worth $50 million or less in a 12-month period
• C. securities to no more than 35 unaccredited investors within a 12-month period
• D. a large block of previously outstanding securities

Correct Answer: C

Explanation:

C. A Regulation D offering is also known as a private placement. It is an offering to an unlimited amount of accredited investors but only 35 unaccredited (small) investors per year. As such, Regulation D transactions are exempt from the full registration requirements under the Securities Act of 1933.