What are the two basic objectives of the 1933 Securities Act quizlet? (2024)

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.

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

The Securities Act of 1933 has two basic objectives: To require that investors receive financial and other significant information concerning securities being offered for public sale; and. To prohibit deceit, misrepresentations, and other fraud in the sale of securities.

What was the objective of the 1933 Securities Act quizlet?

The Securities Act of 1933 regulates new issues of corporate securities sold to the public. The act is also referred to as the Full Disclosure Act, the Paper Act, the Truth in Securities Act, and the Prospectus Act. The purpose of the act is to require full, written disclosure about a new issue.

What are the two main purposes of the Securities Exchange Act?

The Securities Exchange Act of 1934 regulates secondary financial markets to ensure a transparent and fair environment for investors. It prohibits fraudulent activities, such as insider trading, and ensures that publicly traded companies must disclose important information to current and potential shareholders.

What is the Securities Act of 1933 simple?

The Securities Act of 1933 (as amended, the “Securities Act”) was passed to ensure that investors have financial and other important information about securities that are being sold publicly. It also bans the use of fraud, deceit, and misrepresentation in the sales of securities.

What does the Securities Act of 1933 cover quizlet?

The Securities Act of 1933 covers the new issue (primary market) and defines exempt issuers and exempt transactions. If an issuer is exempt or if a new non-exempt issue is sold in an exempt transaction, that new issue does not have to be registered under the Act. Otherwise, registration is required.

What are the two 2 components of securities market?

The market in which securities are issued, purchased by investors, and subsequently transferred among investors is called the securities market. The securities market has two interdependent and inseparable segments, viz., the primary market and secondary market.

Which of the following is a basic premise of the Securities Act of 1933 quizlet?

The Act of 1933 requires that a registration statement be filed with the SEC before any sales related activities can take place. Set of documents, including a prospectus, which a company must file with the U.S. Securities and Exchange Commission before it proceeds with a public offering.

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 is the main goal of securities regulation?

Regulation should detect, deter and penalize market manipulation and other unfair trading practices. Regulation should aim to ensure that investors are given fair access to market facilities and market or price information.

What are the two primary purposes of a securities exchange quizlet?

The two main purposes of a securities exchange are to provide a place for people to buy and sell securities and to determine fair market prices for those securities based on supply and demand.

What caused the Securities Act of 1933?

The development of federal securities law was spurred by the stock market crash of 1929, and the resulting Great Depression. In the period leading up to the stock market crash, companies issued stock and enthusiastically promoted the value of their company to induce investors to purchase those securities.

Which of the following is the main focus of the Securities Exchange Act of 1934?

AN ACT To provide for the regulation of securities exchanges and of over-the- counter markets operating in interstate and foreign commerce and through the mails, to prevent inequitable and unfair practices on such exchanges and markets, and for other purposes.

What is Section 4 A 2 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 did the Banking Act of 1933 do?

The Glass-Steagall Act effectively separated commercial banking from investment banking and created the Federal Deposit Insurance Corporation, among other things. It was one of the most widely debated legislative initiatives before being signed into law by President Franklin D.

What is Section 11 of the 1933 Act?

Section 11 provides that issuers, underwriters, officers and directors of the issuer, and any other expert who helped prepare the registration statement (e.g. accountants, lawyers) are strictly liable for any misrepresentation or omission of material information, i.e. securities fraud, in their registration statement.

What does the Securities Act of 1933 address?

The Securities Act is in essence a disclosure statute. It 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 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 was the Securities Act of 1933 Britannica?

The Securities Act of 1933 provided government oversight of stock trading. The Federal Deposit Insurance Corporation (FDIC) protected depositors' bank accounts. Later programs included the Social Security Act, the Works Progress Administration (WPA), and the National Labor Relations Act.

What are the two main types of securities?

Equity securities – which includes stocks. Debt securities – which includes bonds and banknotes.

What are the objectives of the security market?

Securities and Exchange Board of India (SEBI) is the principal regulator of the securities market and has 3 principal objectives viz. facilitating growth of capital markets, protecting the interests of small investors and maintaining integrity of markets.

What is Level 2 securities example?

An interest rate swap is an example of a Level 2 asset. The asset value can be determined based on the observed values for underlying interest rates and market-determined risk premiums.

What is Section 2 of the Securities Act of 1933?

SEC.

(2) The Commission is prohibited from registering, or re quiring, recommending, or suggesting, the registration under this title of any security-based swap agreement (as defined in section 3(a)(78) of the Securities Exchange Act of 1934).

What is one of the two principal regulatory components of the Securities Act of 1933?

One of the two principal regulatory components of the 1933 Act is: registration provisions.

What was the main goal of the Securities Exchange Act of 1934?

To protect investors, Congress crafted a mandatory disclosure process designed to force companies to disclose information that investors would find pertinent to making investment decisions. In addition, the Exchange Act regulates the exchanges on which securities are sold.