Which of the following is an exempted transaction under the Securities Act of 1933?

• A. Transactions by issuer that involve a public offering
• B. Transactions by an underwriter in a public offering
• C. Transactions by any person other than issuer, underwriter, or dealer
• D. A secondary offering registered with the SEC

Answer: (C)

Public offerings must be registered to protect investors by providing needed disclosures, but some sales are exempt from registration. The key exemption here applies to nonissuer transactions—sales made by a person who is not the issuer, an underwriter, or a dealer. These nonissuer transactions aren’t part of a public distribution, so they don’t have to be registered with the SEC under the applicable exemption (often known as the Section 4(1) exemption).

That’s why a sale by someone other than the issuer, underwriter, or dealer fits the exempt category. The other scenarios involve a public distribution or a sale that is already registered, so they don’t qualify as exempt. For example, an issuer conducting a public offering must register unless another specific exemption applies; an underwriter in a public offering is part of the distribution process; and a secondary offering that’s registered with the SEC has already gone through the registration process.