primary markets - THE PRIMARY MARKETS Financial markets can...

Info icon This preview shows pages 1–9. Sign up to view the full content.

View Full Document Right Arrow Icon
THE PRIMARY MARKETS
Image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Financial markets can be categorized as those dealing with newly issued financial claims, called the primary market; and those for exchanging financial claims previously issued, called the secondary market, or the market for seasoned securities.We will focus on the primary market for securities.
Image of page 2
Regulation of the issuance of securities: Regulation of the issuance of securities: Underwriting activities are regulated by the Securities and Exchange Commission. The Securities Act of 1933 governs the issuance of securities. The act requires that a registration statement be filed with the SEC by the issuer of a security. The type of information contained in the registration statement is the nature of the business of the issuer, key provisions or features about the security, the nature of the investment risks associated with the security, and the background of management.
Image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
The registration is actually divided into two parts. Part I is the prospectus. This part is typically distributed to the public as an offering of the securities. Part II contains sup-plemental information, which is not distributed to the public as part of the offering but is available from the SEC upon request.
Image of page 4
SHELF REGISTRATION RULE SHELF REGISTRATION RULE In 1982 the SEC approved Rule 415, which permits certain issuers to file a single registration document indicating that it intends to sell a certain amount of a certain class of securities at one or more times within the next 2 years
Image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Rule 415 is popularly referred to as the shelf registration rule because the securities can be viewed as sitting on a "shelf' and can be taken off that shelf and sold to the public without obtaining additional SEC approval.
Image of page 6
CONTINUED REPORTING CONTINUED REPORTING Any company that publicly offers a security in the United States becomes a reporting company and, as such, is subject to the Securities Exchange Act of 1934. This act specifies that a reporting company file with the SEC annual and periodic financial reports. The financial reports must be prepared according to generally accepted accounting principles (GAAP).
Image of page 7

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
PRIVATE PRIVATE PLACEMENT OF PLACEMENT OF SECURITIES SECURITIES Public and private offerings of securities differ in terms of the regulatory requirements that must be satisfied by the issuer. The Securities Act of 1933 and the
Image of page 8
Image of page 9
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern