Study guide
16.3 Exempt Securities
Series 65 Uniform Investment Adviser Law
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1 Introduction
About the Series 65 How to Use This Guide
2 Chapter 1: Economic Factors & Business Cycles
1.1 Business Cycles 1.2 Monetary Policy 1.3 Fiscal Policy 1.4 Inflation & Deflation 1.5 Interest Rates & Yield Curves 1.6 Global Economic Factors
3 Chapter 2: Financial Reporting & Analytical Methods
2.1 Financial Statements Overview 2.2 Accounting Fundamentals 2.3 SEC Filings & Annual Reports 2.4 Financial Ratios 2.5 Time Value of Money 2.6 IRR and NPV 2.7 Descriptive Statistics
4 Chapter 3: Types of Risk
3.1 Systematic (Market) Risk 3.2 Unsystematic (Company-Specific) Risk 3.3 Interest Rate & Reinvestment Risk 3.4 Inflation & Currency Risk 3.5 Liquidity Risk & Opportunity Cost 3.6 Risk Measurement & Portfolio Theory
5 Chapter 4: Cash Equivalents & Fixed Income Securities
4.1 Cash & Cash Equivalents 4.2 Treasury Securities 4.3 Agency Securities 4.4 Corporate Bonds 4.5 Municipal Bonds 4.6 Bond Pricing & Yields
6 Chapter 5: Equity Securities
5.1 Common Stock 5.2 Preferred Stock 5.3 Shareholder Rights & Corporate Actions 5.4 Equity Valuation Methods 5.5 ADRs, REITs & Other Equity Securities
7 Chapter 6: Pooled Investments
6.1 Mutual Funds 6.2 Mutual Fund Costs & Fees 6.3 Exchange-Traded Funds (ETFs) 6.4 Closed-End Funds & UITs 6.5 Hedge Funds & Private Equity
8 Chapter 7: Derivatives, Alternative Investments & Insurance Products
7.1 Options Basics 7.2 Options Strategies 7.3 Alternative Investments 7.4 Annuities 7.5 Life Insurance Products
9 Chapter 8: Client Types & Profiles
8.1 Individual Clients 8.2 Business Entity Clients 8.3 Trusts & Estates 8.4 Accredited & Qualified Investors 8.5 Suitability & Know Your Customer
10 Chapter 9: Portfolio Theory & Capital Markets
9.1 Modern Portfolio Theory 9.2 Capital Asset Pricing Model (CAPM) 9.3 Efficient Market Hypothesis 9.4 Risk & Performance Measures 9.5 Asset Allocation
11 Chapter 10: Portfolio Management Strategies
10.1 Investment Styles 10.2 Portfolio Management Techniques 10.3 Fixed Income Strategies 10.4 Return Calculations
12 Chapter 11: Tax Considerations & Retirement Planning
11.1 Capital Gains & Investment Taxes 11.2 Retirement Plans Overview 11.3 Individual Retirement Accounts (IRAs) 11.4 Education Savings Plans 11.5 Distributions & RMDs
13 Chapter 12: ERISA, Special Accounts & Performance Measures
12.1 ERISA Requirements 12.2 Special Account Types 12.3 Performance Measures & Reporting 12.4 QDROs & Special Situations
14 Chapter 13: Regulation of Investment Advisers
13.1 Investment Advisers Act of 1940 13.2 Registration Requirements 13.3 Recordkeeping Requirements 13.4 Custody Requirements 13.5 Exempt Reporting Advisers
15 Chapter 14: Regulation of Investment Adviser Representatives
14.1 IAR Definition & Requirements 14.2 Registration & Post-Registration 14.3 IARs of Federal Covered Advisers
16 Chapter 15: Regulation of Broker-Dealers & Agents
15.1 Broker-Dealer Definition 15.2 Agent Registration 15.3 Regulation Best Interest
17 Chapter 16: Securities Registration & Exemptions
16.1 Uniform Securities Act 16.2 Securities Registration Methods 16.3 Exempt Securities 16.4 Exempt Transactions
18 Chapter 17: Communications & Client Relationships
17.1 Advertising Rules 17.2 Social Media & Electronic Communications 17.3 Client Agreements & Disclosure 17.4 Proxy Voting & Other Obligations
19 Chapter 18: Ethics & Fiduciary Obligations
18.1 Fiduciary Duties 18.2 Prohibited Practices 18.3 Senior & Vulnerable Adult Protection 18.4 AML & Compliance Programs
16.3 Exempt Securities
Key Takeaways Explain This Topic AI
Exempt from registration does not mean exempt from antifraud.
U.S. government and municipal securities are exempt from federal and state registration.
Bank and insurance company securities are generally exempt.
Commercial paper exemption requires <=270 days, $50,000 minimum, and investment grade.
Federal covered securities require only notice filing at the state level.
States retain antifraud authority over all securities.
Last updated: December 2025
Certain securities are exempt from state registration requirements due to their nature or the issuer's characteristics. Understanding these exemptions is critical for the Series 65 exam.
Critical Principle
Exempt from registration does NOT mean exempt from antifraud provisions.
All securities—whether exempt or not—remain subject to:
- State antifraud provisions
- Federal antifraud provisions
- General fraud laws
- Government Securities
- Federal Government Securities
- Security Type Details
- Treasury Securities T-bills, T-notes, T-bonds, TIPS
- Agency Securities GNMA, FNMA, FHLMC
- STRIPS Separately traded registered interest and principal
- Government-Guaranteed Securities with U.S. government backing
All federal government securities are exempt from state registration .
State and Municipal Securities
- Security Type Details
- General Obligation Bonds Backed by taxing power
- Revenue Bonds Backed by project income
- State Agency Securities State authority obligations
- Municipal Notes TANs, RANs, BANs
Municipal securities are exempt from both federal and state registration .
Foreign Government Securities
- Requirement Details
- Diplomatic Relations U.S. must have diplomatic relations with issuing government
- Exempt Status Exempt from state registration
- Examples Canadian provincial bonds, sovereign debt
- Financial Institution Securities
- Bank-Issued Securities
- Issuer Exempt Status
- National Banks Exempt (federally chartered)
- State-Chartered Banks Exempt if organized under state law
- Savings Institutions Generally exempt
- Trust Companies Exempt if state-supervised
- Insurance Company Securities
- Characteristic Details
- Separate Regulation Subject to state insurance regulation
- Exempt from USA Not securities under most circumstances
- Variable Products May be securities AND insurance
- Other Exempt Securities
- Nonprofit Organizations
- Type Requirements
- Religious Organizations Organized for religious purposes
- Educational Institutions Schools, colleges, universities
- Charitable Organizations 501(c)(3) organizations
- Fraternal Organizations Benefit members only
- Commercial Paper
- Requirement Details
- Maturity 9 months or less (270 days)
- Minimum Denomination $50,000
- Investment Grade Must be rated in top 3 categories
- Not Advertised Not offered to general public
- Other Categories
- Category Details
- Public Utilities Regulated by utility commissions
- Railroad Securities Subject to federal regulation
- Employee Benefit Plans ERISA-qualified plans
- Cooperative Securities Agricultural cooperatives
- Federal Covered Securities
Under NSMIA, certain securities are "federal covered" and exempt from state registration:
Categories of Federal Covered Securities
- Category Examples
- Exchange-Listed Securities listed on NYSE, NASDAQ, NYSE American
- Registered Investment Companies Mutual funds, ETFs, closed-end funds
- Qualified Purchaser Sales Sales only to qualified purchasers
- Rule 506 Offerings Regulation D private placements
- Regulation A Tier 2 Offerings up to $75 million
- State Authority
- Authority Retained Authority Preempted
- Antifraud enforcement Registration requirements
- Notice filing/fees Merit review
- Investigation Substantive review of offering
On the Exam: Even though federal covered securities are exempt from state registration, states can still require notice filing, collect fees, and enforce antifraud provisions.
Exempt Securities Summary Table
- Security Type Federal Registration State Registration
- U.S. Government Exempt Exempt
- Municipal Bonds Exempt Exempt
- Bank Securities Exempt Exempt
- Insurance Products Usually exempt Usually exempt
- Exchange-Listed Required Notice filing only
- Mutual Funds Required Notice filing only
- Commercial Paper Exempt Exempt
- Key Takeaways
- Exempt from registration ≠ exempt from antifraud provisions
- Federal government and municipal securities are exempt from all registration
- Bank-issued and insurance company securities are generally exempt
- Commercial paper must meet specific requirements (≤270 days, $50,000+, investment grade)
- Federal covered securities require only notice filing at state level
- States retain antifraud authority over all securities