Practice Quiz

FINRA Series 6

Category - Series 6

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Regulation D:

I. enables smaller firms to raise capital more quickly and more cheaply.
II. exempts the issuing firm from all disclosure requirements as long as the issue is being sold to no more than five investors.
III. has restrictions regarding the resale of the securities being sold.
  1. I only
  2. I and II only
  3. I and III only
  4. I, II, and III
Explanation
Answer: C - Only Selections I and III are accurate statements regarding Regulation D. Regulation D enables smaller firms to raise capital more quickly and more cheaply, but it also restricts the resale of the securities being sold in a Regulation D offering. It does not exempt the issuing firm from all disclosure requirements, even if the issue is being sold to only a single investor. The disclosure requirements are minimal with a Regulation D offering, however.
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