StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...
Free

1933 Securities Act - Essay Example

Cite this document
Summary
The Securities Act of 1993 is a federal legislation enacted in the aftermath of the 1929 market crash with the aim to enhance transparency in financial statements to enable investors make informed investment decisions…
Download full paper File format: .doc, available for editing
GRAB THE BEST PAPER94.4% of users find it useful
1933 Securities Act
Read Text Preview

Extract of sample "1933 Securities Act"

1933 Securities Act 1933 SECURITIES ACT The Securities Act of 1993 is a federal legislation enacted in the aftermath of the 1929 market crash with the aim to enhance transparency in financial statements to enable investors make informed investment decisions, as well as to establish rules and regulations against fraudulent activities and misrepresentation in the securities market (Hecker, 2014). It was the first federal law covering the trade in securities, with this trade governed primarily by state laws before the 1929 market crash and the subsequent federal legislation.

The federal government, as a result of the turmoil faced by U.S. investors, sought to re-establish investor confidence and stability in the overall security-trade system. Generally, the Act was enacted due to the realization that more information was required about and within the securities market. In this case, the Act addressed requirements in the securities market to enhance disclosure by requiring all companies in the U.S. to seek registration with the Securities and Exchange Commission before beginning their operations (Hecker, 2014).

This registration was meant to ensure that companies gave potential investors and the Securities and Exchange Commission with relevant information, specifically through registration statements and prospectus. Exempt Securities However, under the Securities Act of 1933, specific securities are exempted from these registration requirements. These exempt securities either come from other government regulatory agencies with a form of jurisdiction over the securities’ issuers, or from issuers with a high credit worthiness level.

These securities include municipal bonds such as local government bonds, securities issued by federal agencies or the United States’ government, and securities issued by credit unions, savings institutions, and banks (OConnor, 2014). In addition, other exempt securities include public utility bonds or stocks, fixed annuities and insurance policies, and securities issued by non-profit, educational, and religious organizations. Finally, bankers’ acceptances, bills of exchange, notes, and commercial papers with initial maturity periods of less than 270 days are also included under exempt securities.

In this case, the fixed annuities are included under securities that are exempt from registration with the Securities and Exchange Commission because insurance companies that issue them are guarantors of the payout (OConnor, 2014). Nevertheless, variable annuities need to be registered since the payout varies based on how securities in separate accounts perform. Exempt Transactions Other securities offered by corporations may also be exempted from requirements form full registration under the Securities Act of 1993, in this case as a result of the nature of the securities’ sales.

Intrastate offerings are one example of exempt transactions, in which security offerings within an individual state by companies incorporated in that state selling at least 80% of the business in the state to the state’s residents are exempt from SEC registration (OConnor, 2014). Regulation-A offerings, which are security offerings worth less than $5 million over a period of 12 months, are also exempted from requirements to fully register with the SEC; although the issuer is still required file abbreviated or simplified registration statements.

Regulation D offerings, which involve offering of securities to fewer than 35 unaccredited investors annually and also referred to as private placements, are also exempt from full registration with the SEC (OConnor, 2014). However, securities that are exempt from SEC registration are still subjected to antifraud regulations under the Act, where the issuers are required to provide accurate data and information on securities offered to the public. Reference Hecker, A. (2014).

Securities Act of 1933. St. Johns Law Review, 8(1), 188-193 OConnor, S. (2014). The Securities Act of 1933: A Jurisdiction Puzzle. Brooklyn Law Review, 79(3), 1233-1264

Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“1933 Securities Act Essay Example | Topics and Well Written Essays - 500 words”, n.d.)
1933 Securities Act Essay Example | Topics and Well Written Essays - 500 words. Retrieved from https://studentshare.org/law/1702532-1933-securities-act
(1933 Securities Act Essay Example | Topics and Well Written Essays - 500 Words)
1933 Securities Act Essay Example | Topics and Well Written Essays - 500 Words. https://studentshare.org/law/1702532-1933-securities-act.
“1933 Securities Act Essay Example | Topics and Well Written Essays - 500 Words”, n.d. https://studentshare.org/law/1702532-1933-securities-act.
  • Cited: 0 times

CHECK THESE SAMPLES OF 1933 Securities Act

The Securities and Exchange Commission

The federal statutes and rules require companies to have “full disclosure and transparency” whenever it “sells stocks or bonds to the public” (Johnson 993), or to supply “a detailed public disclosure document” to both “investors and regulators” (securities act of 1933 §§ 5, 10, 15 U.... This requirement however is not applicable to private placements wherein “a company sells an investment outside of the normal public securities markets” (securities act of 1933 § 4(2), 15 U....
4 Pages (1000 words) Essay

Why Securities Act of 1933 is Necessary

This essay "Why securities act of 1933 is Necessary" ensures that securities act of 1933 is necessary to bring into light more information about the offered securities for the investors.... o, the underlying principle of the 1933 act was to help potential investors get information about the company (issuer) and its securities that are offered for sale publicly.... egardless of whether securities must be registered, the 1933 act makes it illegal to commit fraud in conjunction with the offer or sale of securities....
4 Pages (1000 words) Essay

Private Securities Litigation Reform Act's

he district court held that the plaintiffs had failed to state sufficiently particularize claims under the 1933 Securities Act and the 1934 Exchange Act (2005).... In the paper “Private Securities Litigation Reform act's” the author discusses the case where Plaintiffs were former Daou Inc....
10 Pages (2500 words) Essay

Research paper SarbanesOxley Act of 2002 and DoddFrank law on banking industry

Following the financial scandals that rocked Enron and many other firms in the year 2002 and the financial crisis of between 2007 and 2011, the Sarbanes–Oxley act of 2002 (Sarbox) and the Dodd–Frank law were enacted.... To assess the effects of the legislation, this paper will look at the wealth effects that surround the passage of the act.... The investors and the analysts will assess the benefits that this act has brought to their wealth status and whether or not it brought a significant difference since its enacting....
4 Pages (1000 words) Essay

Sarbanes-Oxley Act of 2002, the Securities Act of 1933, and the Securities Act of 1934

securities act of 1933 is often considered as ‘Truth of Securities', which requires an effective set of factors for the companies in terms of calling for registration.... The following are the fundamental requirements associated with the securities act of 1933. However, the… In this regard, few exemptions of the registration requirements have been provided hereunder. The Securities Exchange Act of 1934 generally includes the authority to regulate, memorandum TIM FERCHILL ……………....
2 Pages (500 words) Essay

Objectives of the 1933 Act

The act is also referred to as the Truth in the securities act (Atkins, Edwards and Moulton, 121).... The act is also referred to as the Truth in the securities act (Atkins, Edwards and Moulton, 121).... The agency tends to provide letters of deficiency after the registration documents are reviews (The securities act Of 1933).... he securities act Of 1933.... The act has two objectives. The first objective of the act is Objectives of 1933 act This legislation was enacted so that the public can know more about the security market....
1 Pages (250 words) Essay

International Tax and Estate Planning Benchmark Assignment 5

nswer to question sevenThe name of the exemption under the 1933 Securities Act available for offshore including the offshore life insurance is the Reg S exemption.... Non-resident alien individuals who are involved in various businesses in the United States or those who have income from the United States sources must fill an income return on form 1040NR (Granwell, 2011)....
1 Pages (250 words) Coursework

Securities Act of 1934

securities act OF 1934 While on the market, securities and issuers are regulated by the Securities Exchange Act of 1934.... In accordance to the act, financial information that pertains to some corporations should be disclosed publicly.... Through Section 16 of the act, the individuals who have access to inside information have to declare their holdings by filing reports.... The 1934 act antifraud provision entails regulating the propriety of sales within the marketplace....
1 Pages (250 words) Essay
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Contact Us