Under Exempt Securities, which category includes securities issued by nonprofit organizations?

• A. Public Utility Securities
• B. Securities issued by nonprofit organizations
• C. Federal Covered Securities
• D. Depository Institutions

Answer: (B)

Exempt securities include offerings by issuers that regulators treat as less burdensome to register. Securities issued by nonprofit organizations are one of those exempt categories. Not-for-profit entities such as churches, charities, or hospitals can issue securities that are exempt from state registration because their fundraising is regulated and they operate under a different oversight framework, making a full registration process unnecessary for many offerings. This is why this choice is the best answer: it directly identifies securities issued by nonprofit organizations as an exempt category.

Other options point to different exempt categories (such as those involving utilities, federal-covered securities, or depository institutions) and do not describe the nonprofit-issuer exemption.