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Is the definition of "exempt security" discussed in paragraph 26 of this document?

http://www.google.com/patents/US20020007335

**Claim #8 from this document published in 2002:** A method for securities trading that enables principal-to-principal exchange of financial information, including postings of firm offers to buy and sell any registered or unregistered securities that have been issued by any securities issuer, and the negotiation and mandated settlement of all securities transactions without the use of an intermediary brokerage or conventional securities exchange, over an electronic network accessible to potential sellers and buyers, comprising the steps of: (a) requiring each of said potential buyers and sellers to satisfy membership requirements imposed by the trading system manager as a condition for access to restricted and unrestricted areas within said system and for access to particular postings, further comprising the steps of: (1) electronically receiving membership data over the electronic network from each of said potential buyers and sellers, said membership data comprising data sufficient to identify each of said potential buyers and potential sellers and to pre-qualify them for access to postings of securities on the system or to the posting members; (2) storing said membership data in an electronic database securities trading; (b) electronically receiving, storing and displaying the members' posting data, said posting data comprising firm offers to buy or otherwise acquire, or to sell or otherwise transfer, ownership interests in their securities, further comprising the steps of: (1) receiving said posting data over said electronic network; (2) organizing and storing said posting data in an electronic database; (3) determining any restrictions to be imposed by said trading system on member access to said posting data or to the posting member; (4) electronically transmitting said posting data over said network to all members who are not restricted from access to said posting data or to the posting member; and (5) electronically transmitting information over said network that is sufficient to enable potential buyers and sellers to contact each other about their firm offers securities trading; (c) electronically receiving, storing and displaying information sufficient to describe and transmit firm offers between members and said posting members, including proposed transaction terms, and further comprising the steps of: (1) receiving an acceptance of said offer over said network from a responding member; (2) storing said offer or acceptance of said offer in a database; (3) electronically transmitting said offer or acceptance of said offer over the network to the responding party, with information sufficient to enable the parties to contact each other securities trading; and (d) requiring potential buyers and sellers to use a mandated transaction settlement facility and transmit standardized material terms of an agreement to efficiently conduct a transaction in said security, further comprising the steps of: (1) electronically transmitting to said potential buyers and sellers data sufficient to communicate with a transaction settlement facility mandated to said potential buyers and sellers; (2) electronically receiving from said potential seller and said potential buyer their responses to each other effecting notification that an agreement has been reached between said potential buyer and said potential seller for the transfer of said security, wherein said notification comprises data describing standardized material terms of said agreement and identifying said potential buyer's and potential seller's agreement to said mandated settlement facility; (3) storing said notification in an electronic database; and (4) electronically transmitting said material terms to said mandated settlement facility for the purpose of said mandated settlement facility generating standardized transaction settlement documents.

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Could you be more clear about your question, why are you specifically asking about the verbiage of "exempt security"? –  Soren Jul 17 at 3:49
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