SERIES 6 EXAM REQUIRES KNOWLEDGE OF REGULATION D AND PRIVATE PLACEMENTS

Planning to take the Series 6 exam to qualify as a FINRA-registered representative able to sell investment companies and variable products? Then make sure you study the provisions of SEC Regulation D which governs the offerings of private placements. Oh? You did not think that the Series 6 would include questions on private placements? Then read on . . .

Section 1.2 of  FINRA's Content Outline for the Series 6 includes a chunk on the provisions of Regulation D. This regulation sets forth conditions under which an issuer may offer a new issue privately, i.e., without making an offering available to the general public. Regulation D consists of nine sub-rules, 500 through 508, that establish conditions and definitions.

Rule 506 is especially important because it lists the conditions for an unlimited amount of securities to be offered. It allows only a limited number of unaccredited investors, but does allow accredited investors to be unlimited in number.

Therefore, Series 6 applicants, make sure you can define who is an accredited investor and who is not. Know the number limit on unaccredited investors. Know what Regulation D allows and what it prohibits.

You can see why the Series 6 can pose problems for those taking it, especially if they go into the exam unprepared on the above.

Be cautious on which Series 6 texts or study books you choose. Make sure that they cover the items in FINRA's Content Outline, including private placements.

For your assistanceBob Eder's book places the numbered sections of FINRA's Content Outline next to major paragraphs.

Bob Eder's study text, Study for the Series 6 Exam, explains Regulation D and private placements, including practice questions. 

Bob Eder's book, Study for the Series 6 Exam, is available from Amazon in either paperback or ebook versions.

Here is the link to Study for the Series 6 Exam on Amazon.

Here is the link to FINRA's Content Outline. Take note of Section 1.2, dealing with Regulation D and private placements.

Bob Eder received his Juris Doctor (J.D.) degree from the University of Utah, Quinney College of Law, in 2001. He is a member of the Utah State Bar, currently on inactive status.

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