Credit Rating Agency Reform Act
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Credit Rating Agency Reform Act
The Credit Rating Agency Reform Act () is a United States federal law whose goal is to improve ratings quality for the protection of investors and in the public interest by fostering accountability, transparency, and competition in the credit rating agency industry. Enacted after being signed by President Bush on September 29, 2006, it amended the Securities Exchange Act of 1934 to require nationally recognized statistical rating organizations (NRSROs) to register with the Securities and Exchange Commission (SEC). Critics had complained that the dominance of "the big three" rating agencies – Standard & Poor's Ratings Services, Moody's Investors Service and the smaller Fitch Rating—were in part responsible for the subprime mortgage crisis of 2006–8. The agencies rated 98% of the trillions of dollars of home-mortgage oriented "structured investment" products. Hundreds of billions of dollars' worth of securities given the agencies highest—triple-A—rating were later d ...
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Investors
An investor is a person who allocates financial capital with the expectation of a future return (profit) or to gain an advantage (interest). Through this allocated capital most of the time the investor purchases some species of property. Types of investments include equity, debt, securities, real estate, infrastructure, currency, commodity, token, derivatives such as put and call options, futures, forwards, etc. This definition makes no distinction between the investors in the primary and secondary markets. That is, someone who provides a business with capital and someone who buys a stock are both investors. An investor who owns stock is a shareholder. Types of investors There are two types of investors: retail investors and institutional investors. Retail investor * Individual investors (including trusts on behalf of individuals, and umbrella companies formed by two or more to pool investment funds) * Angel investors (individuals and groups) * Sweat equity investor In ...
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Chicago Stock Exchange
NYSE Chicago, formerly known as the Chicago Stock Exchange (CHX), is a stock exchange in Chicago, Illinois, US. The exchange is a national securities exchange and self-regulatory organization, which operates under the oversight of the U.S. Securities and Exchange Commission (SEC). Intercontinental Exchange (ICE) acquired CHX in July 2018 and the exchange rebranded as NYSE Chicago in February 2019. History 1882–1900 The Chicago Stock Exchange was founded in a formal meeting on March 21, 1882. At this time, Charles Henrotin was elected the chairman and president. In April that year, a lease was taken out at 115 Dearborn Street for the location of the exchange and during that year 750 memberships were sold. On May 15, 1882, the Chicago Stock Exchange officially became public and opened its offices, with Henrotin being the first to promote it along with some business associates. In 1894, the Chicago Stock Exchange moved its trading floor to the old Chicago Stock Exchange bu ...
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Securities And Exchange Act
The Securities Exchange Act of 1934 (also called the Exchange Act, '34 Act, or 1934 Act) (, codified at et seq.) is a law governing the secondary trading of securities (stocks, bonds, and debentures) in the United States of America. A landmark of wide-ranging legislation, the Act of '34 and related statutes form the basis of regulation of the financial markets and their participants in the United States. The 1934 Act also established the Securities and Exchange Commission (SEC), the agency primarily responsible for enforcement of United States federal securities law. Companies raise billions of dollars by issuing securities in what is known as the primary market. Contrasted with the Securities Act of 1933, which regulates these original issues, the Securities Exchange Act of 1934 regulates the secondary trading of those securities between persons often unrelated to the issuer, frequently through brokers or dealers. Trillions of dollars are made and lost each year through tr ...
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Williams Act
The Williams Act (USA) refers to 1968 amendments to the Securities Exchange Act of 1934 enacted in 1968 regarding tender offers. The legislation was proposed by Senator Harrison A. Williams of New Jersey. The Williams Act amended the Securities and Exchange Act of 1934 (15 U.S.C. § 78a et seq.) to require mandatory disclosure of information regarding cash tender offers. When an individual, group, or corporation seeks to acquire control of another corporation, it may make a tender offer. A tender offer is a proposal to buy shares of stock from the stockholders for cash or some type of corporate security of the acquiring company. Since the mid-1960s, cash tender offers for corporate takeovers have become favored over the traditional alternative, the proxy campaign. A proxy campaign is an attempt to obtain the votes of enough shareholders to gain control of the corporation's board of directors. Because of abuses with cash tender offers, Congress passed the Williams Act in 1968, w ...
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Investment Company Act Of 1940
The Investment Company Act of 1940 (commonly referred to as the '40 Act) is an act of Congress which regulates investment funds. It was passed as a United States Public Law () on August 22, 1940, and is codified at . Along with the Securities Exchange Act of 1934, the Investment Advisers Act of 1940, and extensive rules issued by the U.S. Securities and Exchange Commission; it is central to financial regulation in the United States. It has been updated by the Dodd-Frank Act of 2010. It is the primary source of regulation for mutual funds and closed-end funds, now a multi-trillion dollar investment industry. The 1940 Act also impacts the operations of hedge funds, private equity funds and even holding companies. History Following the founding of the mutual fund in 1924, investors invested in this new investment vehicle heavily. Five and a half years later, the Wall Street Crash of 1929 occurred in the stock market, followed shortly thereafter by the United States entry into ...
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Investment Advisers Act Of 1940
The Investment Advisers Act of 1940, codified at through , is a United States federal law that was created to monitor and regulate the activities of investment advisers (also spelled "advisors") as defined by the law. It is the primary source of regulation of investment advisers and is administered by the U.S. Securities and Exchange Commission. Overview The law provides in part: Contents *Section 201 Findings *Section 202(a) Definitions *Section 202(b) Governments Excepted *Section 203 Registration of Investment Advisers *Section 203A State and Federal Responsibilities *Section 204 Annual and Other Reports *Section 204A Prevention of Misuse of Nonpublic Information *Section 205 Investment Advisory Contracts *Section 206 Prohibited Transactions by Investment Advisers *Section 206A Exemptions *Section 207 Material Misstatements *Section 208 General Prohibitions *Section 209 Enforcement of Title *Section 210 Publicity *Rules, Regulations and Orders (Section 211) *Hearings (Secti ...
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Trust Indenture Act Of 1939
The Trust Indenture Act of 1939 (TIA), codified at , supplements the Securities Act of 1933 in the case of the distribution of debt securities in the United States. Generally speaking, the TIA requires the appointment of a suitably independent and qualified trustee to act for the benefit of the holders of the securities, and specifies various substantive provisions for the trust indenture that must be entered into by the issuer and the trustee. The TIA is administered by the U.S. Securities and Exchange Commission (SEC), which has made various regulations under the act. History Section 211 of The Securities Exchange Act of 1934 mandated that the SEC conduct various studies. Although not expressly required to study the trustee system then in use for the issuance of debt securities, William O. Douglas, who would later become a Commissioner and then Chair of the SEC, was convinced by November 1934 that the system needed legislative reform. In June 1936, the Protective Committee St ...
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Temporary National Economic Committee
The Temporary National Economic Committee (TNEC) was established by a joint resolution of the United States Congress on June 16, 1938 and operated until its defunding on April 3, 1941. The TNEC's function was to study the concentration of economic power and to report to Congress with its findings. Many records of the TNEC are still under seal according to the US National Archives: As specified by the SEC, no one, except government officials for official purposes, may have access to records created and filed by the SEC on behalf of the TNEC, except for the following: certain records relating to the insurance study, consisting of replies to formal questionnaires (but not including replies to questionnaires sent to state supervisory officials and replies to the questionnaire of February 9, 1940, to life insurance agents); exhibits, including rate books and form insurance policies; and all conventional-form annual statements. According to Irving Katz's 1969 article in the Business His ...
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Securities Act Of 1933
The Securities Act of 1933, also known as the 1933 Act, the Securities Act, the Truth in Securities Act, the Federal Securities Act, and the '33 Act, was enacted by the United States Congress on May 27, 1933, during the Great Depression and after the stock market crash of 1929. It is an integral part of United States securities regulation. It is legislated pursuant to the Interstate Commerce Clause of the Constitution. It requires every offer or sale of securities that uses the means and instrumentalities of interstate commerce to be registered with the SEC pursuant to the 1933 Act, unless an exemption from registration exists under the law. The term "means and instrumentalities of interstate commerce" is extremely broad and it is virtually impossible to avoid the operation of the statute by attempting to offer or sell a security without using an "instrumentality" of interstate commerce. Any use of a telephone, for example, or the mails would probably be enough to subject t ...
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Regulation D (SEC)
In the United States under the Securities Act of 1933, any offer to sell securities must either be registered with the United States Securities and Exchange Commission (SEC) or meet certain qualifications to exempt them from such registration. Regulation D (or Reg D) contains the rules providing exemptions from the registration requirements, allowing some companies to offer and sell their securities without having to register the securities with the SEC. A Regulation D offering is intended to make access to the capital markets possible for small companies that could not otherwise bear the costs of a normal SEC registration. Reg D may also refer to an investment strategy, mostly associated with hedge funds, based upon the same regulation. The regulation is found under Title 17 of the Code of Federal Regulations, part 230, Sections 501 through 508. The legal citation is 17 C.F.R. §230.501 ''et seq.'' On July 10, 2013, the SEC issued new final regulations allowing public adver ...
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Stock Exchange
A stock exchange, securities exchange, or bourse is an exchange where stockbrokers and traders can buy and sell securities, such as shares of stock, bonds and other financial instruments. Stock exchanges may also provide facilities for the issue and redemption of such securities and instruments and capital events including the payment of income and dividends. Securities traded on a stock exchange include stock issued by listed companies, unit trusts, derivatives, pooled investment products and bonds. Stock exchanges often function as "continuous auction" markets with buyers and sellers consummating transactions via open outcry at a central location such as the floor of the exchange or by using an electronic trading platform. To be able to trade a security on a certain stock exchange, the security must be listed there. Usually, there is a central location for record keeping, but trade is increasingly less linked to a physical place as modern markets use electronic co ...
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New York Stock Exchange
The New York Stock Exchange (NYSE, nicknamed "The Big Board") is an American stock exchange in the Financial District of Lower Manhattan in New York City. It is by far the world's largest stock exchange by market capitalization of its listed companies at US$30.1 trillion as of February 2018. The average daily trading value was approximately 169 billion in 2013. The NYSE trading floor is at the New York Stock Exchange Building on 11 Wall Street and 18 Broad Street and is a National Historic Landmark. An additional trading room, at 30 Broad Street, was closed in February 2007. The NYSE is owned by Intercontinental Exchange, an American holding company that it also lists (). Previously, it was part of NYSE Euronext (NYX), which was formed by the NYSE's 2007 merger with Euronext. History The earliest recorded organization of securities trading in New York among brokers directly dealing with each other can be traced to the Buttonwood Agreement. Previously, sec ...
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