What does the Securities Act of 1933 require? (2024)

What does the Securities Act of 1933 require?

Often referred to as the "truth in securities" law, the Securities Act of 1933 has two basic objectives: require that investors receive financial and other significant information concerning securities being offered for public sale; and. prohibit deceit, misrepresentations, and other fraud in the sale of securities.

What are the primary requirements of the 1933 Securities Act quizlet?

The Securities Act of 1933 requires the registration of all new nonexempt issues of securities sold to the public. In general, exempt issues include municipal securities, U.S. government securities, bank issues, and nonprofit organization securities. The securities in this question are all nonexempt.

What did the Truth and Securities Act of 1933 require of corporations ______?

A company that is required to register under the '33 act must create a registration statement, which includes a prospectus, with copious information about the security, the company, the business, including audited financial statements.

What does the Securities Exchange Act require?

The Securities Exchange Act requires disclosure of important information by anyone seeking to acquire more than 5 percent of a company's securities by direct purchase or tender offer. Such an offer often is extended in an effort to gain control of the company.

What does the Securities Exchange Act require quizlet?

The Securities Exchange Act of 1934 requires the registration of each securities exchange, so that it now becomes a "self-regulatory organization" (SRO), subject to SEC oversight. In addition, FINRA and the MSRB are SROs.

What are the two basic objectives of the 1933 Securities Act quizlet?

The legislation had two main goals: (1) to ensure more transparency in financial statements so investors can make informed decisions about investments, and (2) to establish laws against misrepresentation and fraudulent activities in the securities markets.

Did the Securities Act of 1933 provide a definition of security?

The primary definitions from the Securities Act of 1933 and the Securities Exchange Act of 1934 similarly define securities as specific instruments such as a “note, stock, treasury stock, security future, security-based swap, bond, debenture” and any instruments that fall into broad categories like “investment ...

What does the Securities Exchange Act of 1934 require quizlet?

The Securities Exchange Act of 1934 requires the registration of each securities exchange, so that it now becomes a "self-regulatory organization" (SRO), subject to SEC oversight. In addition, FINRA and the MSRB are SROs.

Which of the following securities is required to register under the Securities Act of 1933?

The best answer is C. ADRs (American Depositary Receipts) are non-exempt securities and must be registered with the SEC under the Securities Act of 1933.

What is Section 4 of the Securities Act of 1933?

Section 4(a)(2) of the Securities Act of 1933 (the “Act”) exempts from registration "transactions by an issuer not involving any public offering." It is section 4(a)(2) that permits an issuer to sell securities in a "private placement" without registration under the Act.

What was the main purpose of the SEC Act of 1934?

The Securities Exchange Act of 1934 gives the SEC broad powers to enforce U.S. federal securities law, but also investigate potential violations such as insider trading, the sale of unregistered stocks, manipulation of market prices and disclosure of fraudulent financial information.

What is Section 12 of the Securities Act of 1933?

Section 12(2) of the Securities Act of 1933 provides a securities purchaser with an express cause of action against his seller if the purchaser can establish that the seller used interstate commerce or the mails to offer or sell a security by means of a written or oral communication which misstated or omitted to state ...

What is Section 11 of the Securities Act of 1933?

Section 11 of the Securities Act of 1933, as amended (the “1933 Act”), affords investors the primary remedy for misstatements and omissions in registration statements filed with the Securities and Exchange Commission (the “SEC”).

What is the purpose of securities and exchange?

The Securities and Exchange Commission (SEC) oversees securities exchanges, securities brokers and dealers, investment advisors, and mutual funds in an effort to promote fair dealing, the disclosure of important market information, and to prevent fraud.

What is a securities exchange used for?

A stock exchange, securities exchange, or bourse is an exchange where stockbrokers and traders can buy and sell securities, such as shares of stock, bonds and other financial instruments.

What two common sense notions are the securities Acts of 1933 and 1934 based on?

The main purposes of these laws can be reduced to two common-sense notions: Companies publicly offering securities for investment dollars must tell the public the truth about their businesses, the securities they are selling, and the risks involved in investing.

What is the difference between the Securities Act of 1933 and the 1940 Act?

“Many institutional investors may have mandates to make greater allocations to '40 Act funds because they provide stronger investor protections,” Hunt says. “In a '33 Act fund, there's no board of directors, for example, less governance oversight. There aren't the same types of investor protections.”

What is a major difference between the Securities Act of 1933 and the Securities Exchange Act of 1934 quizlet?

The Securities Act of 1933 regulates the new issue market and requires that non-exempt new issues be registered with the SEC and sold with a prospectus giving full disclosure to investors. The Securities Exchange Act of 1934 is a broad ranging law to curb abuses in the trading (secondary) markets.

What security is exempt from the Securities Act of 1933?

Some of the most common examples of exempt securities are those issued by federal or state governments, securities offered to a limited number of investors, securities offered only in a limited geographic area, or those being offered only to accredited investors.

What is Section 24 of the Securities Act of 1933?

Section 24 of the Securities Act of 1933 provides for fines not to exceed $10,000 and a prison term not to exceed five years, or both, for willful violations of any provisions of the act.

Why was the Securities Act created?

The primary goal of the 1933 Securities Act was simply to require securities issuers to disclose all material information necessary for investors to be able to make informed investment decisions on stocks.

What power did the Securities Exchange Act of 1934 gave the SEC?

Through the Exchange Act, the SEC gained the authority to register, regulate, and oversee brokerage firms, transfer agents, and clearing agencies.

Which statement is true regarding the Securities Exchange Act of 1934?

Which statement is TRUE regarding the Securities Exchange Act of 1934? The best answer is C. The anti-fraud provisions of the Act apply to both exempt and non-exempt securities. Thus, if a person fraudulently trades municipal bonds (an exempt security), this person is in violation of the Act.

How does the Securities Exchange Act of 1934 address the issue of insider transactions?

The 1934 Act addressed insider trading directly through Section 16(b) and indirectly through Section 10(b). Section 16(b) prohibits short-swing profits (profits realized in any period less than six months) by corporate insiders in their own corporation's stock, except in very limited circ*mstance.

What are the regulation S of the Securities Act 1933?

Regulation S is generally intended to facilitate two capital-raising scenarios: (i) a U.S. company that issues securities only to foreigners; and (ii) a U.S. investor who enters a foreign market to buy foreign securities.