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How Does a 4(2) Paper differ from a 3(a)3 Paper?

By IndianMoney , 1 year ago

The 4(2) commercial papers differ from the 3(a)3 paper in several ways. The 3(a)3 paper primarily deals with the borrower's use of the proceeds and the maximum debt on maturity whereas 4(2) exemption deals with the manner in which the paper is distributed and to whom it is sold. Also, a borrower under 3(a)3 exemptions must use the fund for current transactions or working capital needs whereas a borrower of 4(2) commercial papers needs to meet specific conditions in order to receive the registration exemption.

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