Securities Law

Securities are fungible document of financial value and are negotiable in nature. There are debt securities, equity securities and derivative contracts. Bank notes, bonds and debentures are examples of debt securities. Shares and Stocks are example of equity securities. Forwards, futures, options and swaps fall under the derivative category.

Legal Framework in United States of America Governing the Securities Trading & Market:

United States of America has formulated legal framework to govern the securities trading and market. A few such laws and legal bodies are explained below:

Securities Act:

Enacted in 1933, the Securities Act is the first such federal legal enactment to regulate the securities market. The securities Act was enacted after the market crash in 1929 to bring back the confidence in the market investors. The Securities Act lays down the regulations governing the sale of securities in the US market.

Securities Exchange Act of 1934:

Securities Exchange Act made registration mandatory for the exchanges, brokers, dealer and listed securities. The main purpose is to prevent abusive and mal-practice in the issuance and trading of securities. It also made certain financial disclosures and insider trading information.

Securities Investor Protection Act:

Enacted in 1970, this act provides for protection to the investors in case of bankruptcy filing by the failing broker.

Securities and Exchange Commission:

The main mandate for Securities and Exchange Commission is to regulate the securities trading in a fair and orderly manner. It regulates the market and provides a fair ground to all the investors irrespective of the size.

State Blue Sky Law:

This state law requires sellers of new issues to register and provide financial and other details in order to provide confidence in the minds of investors. It also provides the investors with data to take an informed judgement.

EDGAR-Sec Filings:

All securities companies are required to file financial data, periodic reports and other details electronically through EDGAR. The data is open for public access free of cost and can be downloaded by public.


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