In U.S. law, a covered security may refer to two categories of securities: * Under The National Securities Markets Improvement Act of 1996, is a security listed on the

NYSE 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 co ...

, AMEX, Midwest (Chicago), or NASDAQ Global Market or any security senior to (bond or preferred) or equal to (rights and warrants). These securities are exempt from registration and advertising filing requirements of the

Uniform Securities Act The Uniform Securities Act (USA) is a model statute designed to guide each state in drafting its state securities law. It was created by the National Conference of Commissioners on Uniform State Laws (NCCUSL). The purpose of the Uniform Securitie ...

but are not exempt from any anti-fraud provisions. * In U.S. Federal income tax law, a covered security is one for the sale of which the broker must report, to the Internal Revenue Service, the customer's basis and information on whether the sale results in a short-term or long-term gain or loss. This rule applies to certain types of securities, acquired after a specified effective date. The law phases in between January 1, 2011, and January 1, 2013 (or later). The latter category was created in an amendment to section 6045 of the

Internal Revenue Code The Internal Revenue Code (IRC), formally the Internal Revenue Code of 1986, is the domestic portion of federal statutory tax law in the United States, published in various volumes of the United States Statutes at Large, and separately as Title 2 ...

in Section 403 of the ''

Energy Improvement and Extension Act of 2008 Public Law 110-343 () is a US Act of Congress signed into law by U.S. President George W. Bush, which was designed to mitigate the growing financial crisis of the late-2000s by giving relief to so-called "Troubled Assets." Three divisions ...

'' (

Public Law 110-343 Public Law 110-343 () is a US Act of Congress signed into law by U.S. President George W. Bush, which was designed to mitigate the growing financial crisis of the late-2000s by giving relief to so-called "Troubled Assets." Three divisions ...

, division B). The law refers to any security in this category as "specified security", and defines such securities to include stock in a corporation, notes, bonds, debentures and other evidence of indebtedness, commodities, commodity contracts or derivatives, and any other financial instrument for which the Secretary of the Treasury or his delegate determines that the reporting of adjusted basis is appropriate. Information is reportable if the security is acquired after a certain effective date (with some exceptions, January 1, 2011).Cost Basis Reporting Overview and FAQs
Internal Revenue Service, U.S. Dep't of the Treasury.

Sources

National Securities Markets Improvement Act of 1996 (Enrolled as Agreed to or Passed by Both House and Senate); Section 18(b)
{{refend Financial regulation in the United States

See also

Sources