Securities Act of 1934

Companies raise capital by issuing shares on the primary market which is regulated by Securities Exchange Act of 1933. The following year Securities exchange Act of 1934 was enacted by Roosevelt administration which regulates securities on the secondary market, where they are traded after original issuance. This Act created Securities and Exchange Commission (SEC) and gave it broad power to register, regulate and oversee securities, markets and financial professionals. SEC has disciplinary power over regulated entities and person associated with them if they engage in prohibited conducts in the market.

Requirements outlined in securities Act of 1934 must be followed by all companies that are listed on stock exchange. Primary requirements include corporate reporting, proxy solicitation, tender offers, insider trading and registration of exchanges and associations.

Companies that have more than $10 million is assets and more than 500 shareholders must do annual and periodic reports.

Proxy materials illustrate specific company's information that are available to shareholders sent before annual shareholder meeting. SEC governs disclosures and materials used to solicit shareholders votes held for the election of directors or approval of corporate actions. This information contained in proxy material must be filed with SEC in advance of solicitation to ensure compliance with the rules.

The Act requires disclosure of important information by anyone who is seeking to acquire more than 5% of ownership in the company by purchasing securities because often this is part of the attempt to gain control over the company.

Insider trading is when someone buys or sells public company's shares and has non-public material information about the stock. It is one of the fraudulent activities connected with offer, purchase and sale of securities, prohibited by The Securities Act of 1934.

Market participants, exchanges, brokers, dealers, transfer agents, clearing agencies are required to register with the SEC meaning they have to file disclosures on regular basis. SEC also regulates nation's self regulatory organizations (SRO). Self regulatory organizations exercise some degree of regulatory authority over an industry or profession. Commission delegated authority to certain SRO like FINRA or NYSE to enforce certain industry standards and requirements related to securities trading and brokerage.

Comments

OTC stocks more difficult to trade and deposit

Mina Mar Group helps micro-cap companies structure their growth. Micro-capitalized companies are those with less than $50,000,000 in equity, sometimes under $1,000,000. Restructuring involves raising money (both debt and stock), and planning how they will eventually harvest that wealth. If you’re a founder or investor, the secret to harvesting your equity is to possess assets with a developed market for their sale; up until recently, that market was the public market. Now, Over-The-Counter Securities (“OTC Securities”) don’t serve that purpose since, unless you’re a tech unicorn doing an IPO, there are essentially no ways to sell the shares you’ve invested in. OTC securities – how they were deposited five years ago. Brokerages all around the country have tightened compliance over the past five years to the point where no one may deposit share certificates into their brokerage accounts, even if they can prove that they paid for them. Consider the following demand from a secondary brok

All-cash, All-stock offer

An acquisition strategy known as an “all-cash, all-stock offer” requires the buyer to commit to purchasing all of the target company’s outstanding shares for a certain amount in cash. It is also characterized as buying all of a company’s outstanding shares from its shareholders in exchange for payment. All-cash, all-stock offers are typically taken into consideration as a strategy to complete an acquisition. This could be an excellent technique the acquiring corporation might use to make the transaction appear sweet and persuade shareholders who are on the fence to accept the sale by offering a premium above the cost at which the shares are now trading. So if it’s that case, if indeed the company was purchased at a premium, then shareholders of the target company could experience an increase in the value of their shares. Even when we talk about cash deals, a stock value for the target firm is discussed, and that value may be considerably higher than its current market price. Therefore,

How important marketing is for Regulation A?

Regulation A+ represents the lately enacted SEC rule that amends and expands the rarely utilized Regulation A offering exemption. Regulation A+ might be viewed as an alternative to a small registered IPO and also, as a substitute or addition to other securities offering procedures that are not subject to registration under the Securities Act. Although Regulation A+ is still quite new, it is swiftly establishing a name as the perfect spot for so many American businesses looking for capital. Reg A+, which is supported by the SEC, actually permits non-SEC reporting corporations to raise capital from public investors while also allowing (or even more motivating) the issuer to publicize their offering openly. The opportunity to publicly market to investors has benefited greatly for numerous corporations. This method is intended to reduce regulatory constraints by allowing companies who wouldn’t have contemplated pursuing total IPOs to get the type of financing necessary to fuel their g

Mina Mar Group

Search This Blog