Certain types of notes, such as a note secured by a home mortgage or a note secured by accounts receivable or other business assets are not securities. Issuer transactions are the means by which businessmen raise capital and involve the sale of securities by the issuer to investor. Trading transactions are the purchasing and selling of outstanding securities among investors. A stock exchange provides a place, rules, and procedures for buying and selling securities. Generally, to have their securities sold and bought on a stock exchange, a company must list its securities on a given exchange.
Securities regulations focus mainly on the market for common stocks.
Both federal and state laws regulate securities. Federal securities laws are generally administrated by the Security and Exchange Commission which was established by the Securities Exchange act of 1934. The first of the federal securities laws enacted was the Federal Securities Act of 1933, which regulates the public offering and sale of securities in interstate commerce. The 1933 Act prohibits the offer or sale of a security not registered with the Securities Exchange Commission and requires the disclosure of certain information to the prospective security's purchaser. The objective of the 1933 Act's registration requirements is to enable a purchaser to make a reasoned decision based on reliable information.