Which of the following securities is exempted from registration before Securities and Exchange Commission?

• A. Participation in profit sharing agreement in a partnership
• B. Investment contracts issued by networking company
• C. Trust certificates and voting trust certificates in a mining company
• D. Certificate of time deposit or money market placement issued by a bank

Answer: (D)

Exemption from SEC registration applies to instruments that aren’t securities or are regulated by another regulator. Certificates of time deposit or money market placements issued by banks are bank products, not securities under the SRC’s scope, and they fall under banking regulation rather than securities regulation. Because of this, they don’t need SEC registration for public offers.

The other options describe instruments that have the characteristics of securities—profit-sharing interests, investment contracts, and certificates tied to a company or mining venture—which would normally be subject to SEC registration unless a specific, applicable exemption exists. Thus, a bank’s certificate of time deposit or money market placement is the best example of an exemption.