Nonissuer transactions by pledges are categorized as exempt transactions under USA.

• A. Exempt
• B. Not exempt
• C. Subject to registration
• D. Not described

Answer: (A)

When securities are pledged as collateral, the sale by the pledgee is treated as a nonissuer transaction. Under the Uniform Securities Act, such nonissuer transactions by pledgees are exempt from registration because the seller is not the issuer and the purpose is to liquidate collateral, not to raise new capital. This exemption facilitates financing by allowing lenders to recover what’s owed without going through the registration process, as long as the sale complies with any applicable conditions. So this statement is correct: nonissuer transactions by pledges are exempt under the USA. The other options would imply registration or description that doesn’t apply to this collateral-related scenario.