Introduction Flashcards
definition of issuer
any company that sells its stock to the public and must comply w/ securities laws
what are the 2 types of securities transactions?
issuer transactions and trading transactions
what is an issuer transaction?
a transaction by an issuer on the primary market that is either an IPO or private placement
what is a secondary market?
a market where the securities being traded have previously been issued by the issuer to the public (through IPO) or select investors (through a private offering) and now all the investors can trade w/ each other (ex. NYSE)
what does it mean to trade over the counter?
it means you are not trading on the exchange
what is a bond?
a debt investment in which an investor loans money to an entity (usually corp or gov) which borrows the funds for a defined time at variable or fixed interest rate. Feature a maturity date (when entity will pay back the principal) and pays periodic interest rates.
what type of investment is a stock?
an equity investment
what is an option?
a contract for the option to buy (call) or sell (put) a security at an agreed-upon price during a certain period of time or on a specific date.
what is a derivative?
a security w/ a price dependent upon or derived from an underlying asset (stock, bond, commodities, currencies, interest rate, market index) that can be traded OTC or on the exchange
what was the most important thing the ‘33 Act gave us?
the requirement that any offer or sale of securities using the means and instrumentalities of interstate commerce must be registered
which market does the ‘33 Act apply to?
primary markets
who runs the ‘33 Act?
the FTC
which market does the ‘34 Act apply to?
secondary market (trading transactions)
what was the most important creation of the ‘34 act?
creation of the SEC
definition of reporting companies
companies that have assets in excess of $10 mil. and a class of equity securities held by at least 2000 record holders
