Securities RegistrationQuestion 43 of 100
A customer telephones her broker-dealer and asks to buy shares of a specific company that is not registered in the state. The firm made no recommendation and no solicitation. The trade is:
a.Prohibited, because the security is not registered in the state
b.Permitted only if the customer is an institution
c.Permitted only after the firm registers the security by qualification
d.Permitted as an unsolicited non-issuer transaction, an exempt transaction the firm may be required to document with a signed customer acknowledgment
Explanation
Unsolicited non-issuer transactions are exempt transactions, which is why an unregistered security may still be purchased when the order originates entirely with the customer. Administrators frequently require the firm to obtain a written customer acknowledgment that the order was unsolicited so the exemption can be verified later. The exemption is not limited to institutions, and no registration of the security is needed.
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