Final answer:
Rule 147 is used for exempting securities sold solely within one state from federal registration requirements, under conditions that align with the SEC's regulations to simplify the selling process for in-state companies. The correct option is 1.
Step-by-step explanation:
Rule 147 is used for the exemption of securities sold within the borders of one state, meaning it allows issuers to offer and sell securities without having to register with the federal Securities and Exchange Commission (SEC), provided that certain conditions are met, such as the company doing a significant amount of business in that state and ensuring that the buyers are residents of the same state.
The Federal Securities Act established legal standards for the disclosure of information relevant to publicly traded securities such as stocks and bonds. The Securities and Exchange Commission (SEC), which was established to regulate and supervise the sale of securities and the sector professionals, enforces Rule 147 under these standards.
Stock Exchanges are organized markets where securities are traded. Companies looking to trade their stocks on an exchange must pay a fee and comply with various regulations, including those pertaining to the public offering of their securities.
However, with Rule 147, the need for such regulation is limited to within the state, thereby simplifying the process for companies operating predominantly within a single state. The correct option is 1.