Term
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Definition
| -Concerned with full and fair disclosure
-Goal=investors are provided with info needed to make informed investment decisions.
-Also provides rules for the conduct of issuers AND investment bankers |
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Term
| Securities Exchange Act of 1934 |
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Definition
| Covers the secondary market (NYSE-self regulated organization). Also created the Securities Exchange Commission. Gives power to FED to oversee the extension of credit in the securities industry |
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Term
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Definition
| Enabled the creation of non-exchange SROs.
Most securities transactions DO NOT take place on an exchange. Instead they take place in the over-the-counter market (OTC). National Association of Securites Dealers (NASD) was created in 1939 to self-regulate the OTC. |
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Term
| Trust Indenture Act of 1939 |
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Definition
| Provides added security for bond investors. Requires an agreement (AKA-indenture) b/w corp that issues and and a trustee who would act for the owners of the bonds in case the corp liquidates. |
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Term
1.Investment Company Act of 1940
2.Investment Adviser Act (1940) |
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Definition
| 1.Covers mutual fund companies (firms that pool investor's money and invest it in securities).
2.Enacted to regulate firms that sell their investment advice for a fee.
Together, the two acts require 1.a mutual fund to register with the SEC as an Investment Company 2.firm managing the assets of the mutual fund to register as an Investment Adviser. |
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Term
| Securities Investor Protection Act of 1970 (SIPC) |
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Definition
| Enabled the creation of industry-funded insurance. This covers the customers of brokerage firms in cases where a firm becomes insolvent. |
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Term
| Employee Retirement Income SEcurity Act of 1974 (ERISA) |
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Definition
| Covers the admin. of private, qualified retirement accounts such as 401(k) plan.
Provides standards for the finding, vesting and other aspects of such pans as well as fiduciary responsibilities of pension fund trustees. |
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Term
| Insider Trading Act of 1988 |
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Definition
| Response to the scandals of the 80's. Elaborates on the Acts of '33 and '34. PLUS sets out criminal penalties. |
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Term
| Federal Telephone Consumer Protection Act of 1991 |
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Definition
| Cold calling Act. Company must have do-not-call list |
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Term
| Penny Stock Cold Calling Rule of 1991 |
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Definition
| Rules require a firm to have a signed disclosure document from potential buyers stating that the investor understands the risks involved.
PENNY STOCK-"non-exchange traded and non=NASDAQ listed security that trades for less than $5/share." |
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Term
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Definition
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Term
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Definition
| Any material used in newspapers, mas, radio, t.v., telephone, recordings, motion pictures, or other public media. |
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Term
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Definition
| Notices, circulars, research reports, form letters, and reprints of published articles. |
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Term
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Definition
| 1.Income-Desire investments that produce a steady, reliable stream of cash. Inflation can erode returns.
2.Growth-Desire captial to appreciate. Possibility of loss.
3.Preservation of captial-Treasury bills
4.Tax Relief-Munis (tax free) or Annuities/Retirement Plan (tax-deferred) |
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Term
| Forms of Account Ownership |
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Definition
| 1.Individual Account-Opened by and for ONE person.
2.Joint Account-More than one owner on record.
3.Corporate Accounts-Person must be authorized to open account by employer.
4.Partnership Account-Partnership agreement will determine which partners are authorized to execute transactions. |
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Term
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Definition
| UGMA-Uniform Gifts to Minors Act--Only one minor per account.
UTMA-Uniform Transfers to Minors Act |
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Term
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Definition
| When a registered rep is given "power of attorney." Has the authorization to do what they think is right for the account. |
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Term
| Common Stock vs. Preferred |
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Definition
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Term
| Calculating Current Yield |
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Definition
| Annualized Dividend/Stocks current market price |
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