Which statement about Rule 147 is true?

• A. It is exempt under federal law but not under the Uniform Securities Act
• B. It applies to all states automatically
• C. It is a requirement to register in all states
• D. It only applies to debt securities

Answer: (A)

Rule 147 provides a federal exemption for intrastate offerings under the Securities Act of 1933, meaning the sale can be exempt from federal registration as long as the offering is confined to residents of one state and meets the issuer’s intrastate criteria. The important point is that this exemption originates at the federal level, and whether a state recognizes or adopts it under its own securities laws (the Uniform Securities Act framework) is not automatic. Some states may have adopted similar intrastate exemptions; others may not, so it’s possible that the federal exemption exists even if the state does not automatically grant the same exemption. That’s why the statement that Rule 147 is exempt under federal law but not under the Uniform Securities Act is true.

Note that Rule 147 does not require registration in all states, it isn’t limited to debt securities, and it can apply to other types of securities sold intrastate, provided the offering stays within residents of the state.