What are some SEC regulations regarding sales of new securities?

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What are some SEC regulations regarding sales of new securities?

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What are some SEC regulations regarding sales of new securities?

Explanation & AnswerSolution by a verified expert

Explanation

Regulations of securities and exchange commission (SEC) regarding sales of new securities are:

Jurisdiction: Securities and exchange commission regulates public offerings with minimum amount of $1.5 million.
Registration : Issue of new securities by a company must be registered with the SEC at least 20 days prior to the general public offer. The application for registration to the SEC should be made in the form S-1 including all the information regarding the company, information regarding issue of securities must be presented in summarised manner in a prospectus attached with the form. If the SEC is satisfied with the application, it will grant the permission for issue, otherwise it will investigate or reject the application.
Prospectus: After the acceptance of application and registration of securities by SEC, a company can present the securities to potential buyers with a draft prospectus containing all the details regarding issues except the final price before the final public offer.
Penalty: If an investor suffers any damage due to the misleading information in a prospectus or financial statement, that investor can sue the company, its directors, agents, underwriters or whosoever is related to the issue.

Verified Answer

SEC regulations regarding sales of new securities are:

Securities and exchange commission regulates public offerings with a minimum amount of $1.5 million.
Issue of new securities by a company must be registered with the SEC at least 20 days prior to the general public offer.The application for registration to the SEC should be made in the form S-1. If the SEC is satisfied with the application, it will grant the permission for issue.
After the acceptance of application and registration of securities by SEC, a company can issue a draft prospectus to the public.
If an investor suffers any damage due to the misleading information presented by the company, that investor can sue the company, its directors, agents, underwriters or whosoever is related to the issue.

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