1933 Securities Act Essay Example | Topics and Well Written Essays - 500 words

1933 Securities Act - Essay Example Generally, the Act was enacted due to the realization that more information was required about and within the securities market. In this case, the Act addressed requirements in the securities market to enhance disclosure by requiring all companies in the U.S. to seek registration with the Securities and Exchange Commission before beginning their operations (Hecker, 2014). This registration was meant to ensure that companies gave potential investors and the Securities and Exchange Commission with relevant information, specifically through registration statements and prospectus. However, under the Securities Act of 1933, specific securities are exempted from these registration requirements. These exempt securities either come from other government regulatory agencies with a form of jurisdiction over the securities’ issuers, or from issuers with a high credit worthiness level. These securities include municipal bonds such as local government bonds, securities issued by federal agencies or the United States’ government, and securities issued by credit unions, savings institutions, and banks (OConnor, 2014). In addition, other exempt securities include public utility bonds or stocks, fixed annuities and insurance policies, and securities issued by non-profit, educational, and religious organizations. Finally, bankers’ acceptances, bills of exchange, notes, and commercial papers with initial maturity periods of less than 270 days are also included under exempt securities.