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What do these federal securities laws cover?
The Securities Act generally governs new offerings. Often referred to as the "truth in securities" law, the Securities Act requires that investors receive financial and other significant information concerning securities being newly offered for public sale. The Securities act also prohibits deceit, misrepresentations and other fraud in the offer or sale of securities, whether newly issued or already outstanding.
The Exchange Act provides for investor access to current financial and other information regarding securities, particularly those that trade publicly on exchanges or over-the-counter. The Exchange Act prohibits companies, securities brokerage firms and others from engaging in fraudulent and unfair behavior, such as sales practice abuses and insider trading. The Exchange Act governs the conduct and registration of securities brokers and dealers, the operation of the securities exchanges, such as the New York Stock Exchange, and the self regulatory organization known as the National Association of Securities Dealers, Inc. It also sets forth rules concerning the operation of proxy solicitations by companies and shareholders, tender offers and buying securities on credit (margin).
The Investment Company Act governs activities of investment companies, such as mutual funds, that are primarily serve as collective investment vehicles for others.
The Advisers Act establishes a pattern of regulating those who manage or advise others on how to invest. In some respects, it resembles the Exchange Act that governs the conduct of securities brokers and dealers, and generally requires that firms compensated for advising others about securities investment to register with the SEC and conform to statutory standards designed to protect investors. |
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