Securities Act of 1933
The 'truth in securities' law governing new issues.
What is Securities Act of 1933?
Regulates the primary market. Requires registration and a prospectus for public offerings so investors receive material information, and imposes liability for material misstatements. Often paired in exams with the 1934 Act, which covers the secondary market.
Securities Act of 1933: a worked example
An IPO prospectus filed under the '33 Act.
What is the difference between Securities Act of 1933 and Securities Exchange Act of 1934?
1933 = new issues, primary market, prospectus. 1934 = trading, secondary market, created the SEC. Remember: issue first, then trade.
Often confused with Securities Exchange Act of 1934 - see Securities Act of 1933 vs Securities Exchange Act of 1934 side by side.
More terms in Regulation & Professional Duty
Fiduciary Duty
A legal obligation to act in the client's best interest.
Suitability Standard
A recommendation must be appropriate given the client's profile.
Regulation Best Interest (Reg BI)
SEC rule requiring broker-dealers to act in a retail client's best interest.
Registered Investment Adviser (RIA)
A firm registered to give advice for a fee, holding fiduciary duty.
Broker-Dealer
A firm that executes trades as agent (broker) or principal (dealer).
FINRA
The self-regulatory organization overseeing broker-dealers.
Securities and Exchange Commission (SEC)
The federal agency regulating securities markets.
SIPC
Insurance against broker failure - not against investment losses.