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CHANGE UNIT

Current Unit: UNIT 1: Regulation of Persons & Broker Dealers

Table of Contents

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UNITED SECURITIES ACT

• NO SECURITY IS EXEMPT FROM ANTIFRAUD PROVISIONS
• DEFINITION OF A SECURITY
  • Entails investment of money
  • Common enterprise
  • Carries expectations of profits
  • Entails investor reliance on the efforts of others
• Administrators are authorized by the USA to require agents to obtain written client acknowledgment of unsolicited transactions
• Administrator may deny or revoke exemption from registration
  • Security issued by a nonprofit organization
  • Investment Contracts of employee benefit plans
  • Exempt transaction not involving a federal covered security
• Preorganization Subscription
  • No more then 10 subscribers
  • No payment may be made by subscribers
  • No Commission may be paid to anyone for soliciting
• Under the USA, security means any:
  • Note
  • Stock
  • Treasury stock
  • Options contract
  • Bond
  • Debenture
  • Evidence of indebtedness
  • Certificate of interest or participation in a profit-sharing agreement
  • Collateral trust certificate
  • Preorganization certificate or subscription
  • Transferable share
  • Investment contract
  • Voting trust certificate
  • Certificate of deposit for a security (ADRs, not a bank CD
  • Certificate of interest or participation in an oil, gas , or mining title or less, or in payment out of production under such a title or leave
  • Puts, calls, straddles, options, or privileges on a security
  • Any interest or instrument commonly known as a security
    • The USA considers interests in merchandising marketing schemes, multilevel distributorship arrangements, oil and gas drilling programs, and farm animals, whether it is a feeding or a breeding program, to be investment contracts and, therefore, securities
• NOT A SECURITY
  • Commodities futures contracts(such as gold)
    • However, options on commodity futures are securities under the USA
  • Fixed annuity or variable annuity that provides fixed monthly income
  • Trade confirmations, they are merely reports
    • BUT.. Warrants(rights to purchase) are securities
  • Nonvariable life insurance contracts, IRAs, collectibles, and mortgages are not