The Securities Act of 1933 is Still Protecting Investors
The Securities Act of 1933 was designed to protect investors from being victims of fraud or being swindled. This was the first major federal legislation to manage the offer and sale of securities. The Act was enacted during the Great Depression in the aftermath of the 1929 stock market crash. The Act is also known as the “Truth in Securities Act,” the “Federal Securities Act,” or “1933 Act.”
What Are The Securities Act of 1933 Requirements?
The Securities Exchange Commission (SEC) requires that securities offered or sold to the general public in the United States file a registration statement. The prospectus is usually filed with the registration. A prospectus is the marketing document that the issuer provides to investors. Some of the information that the Securities Act of 1933 requires for registration are:
- Description of the offered securities
- Information of the security management
- Independent accountant certified financial statements
Shortly after the registration is filed with the SEC, they become publicly available on the SEC website. In accordance with the Securities Act of 1933, the issuer must not lie or omit pertinent facts from the prospectus or registration statement. The Act used this legislation as an effort to allow investors to make educated and informed decisions, thus significantly reducing fraud and deception.
Offerings Exempt from the Securities Act of 1933
Not all securities are required to be registered in accordance with the Securities Act of 1933. Private offerings that are offered only to a limited number of people or institutions are not required to be registered. This Act does not require registration of offerings of limited size. It does not apply to offerings within a single state called intrastate offerings. Municipal, state or federal government offerings are also exempt from the Securities Act of 1933.
Securities Act of 1933 Requirements for Issuers
While the Securities Act of 1933 did much good for protecting investors it did complicate matters for honest issuers. Properly registering with the SEC and providing all necessary information is a task that must be completed properly in order to comply. A complete understanding of the legislation is needed to verify both a need for compliance and compliance itself.
Both investors and securities issuers alike need to understand the regulations set forth in the Securities Act of 1933. Issuers must ensure that there is no violation of the registration process in order to successfully comply with federal regulation and to be viewed in a positive manner by both the SEC and potential investors. Investors must ensure that any investments that they choose to participate in meet all of the requirements of the Act of 1933 for their own safety. If you would like more information about the Securities Act of 1933 complete the contact form on this page and a professional will contact you for your complimentary consultation and to answer all your questions.
