alleryStart learning →What does the Securities Act of 1933 require of a new securities issue?
AA minimum price set by the exchange
BA guarantee of repayment to investors
CFull disclosure of information about it
DA rating from an approved credit agency
Answer & Solution
Correct answer: C. Full disclosure of information about it
1. Congress passed the Securities Act of 1933 in response to the 1929 stock market crash and the problems that followed in the Great Depression.
2. It protects investors by requiring full disclosure of information about new securities issues.
3. The issuer must file a registration statement with the SEC.
4. That statement must be approved by the SEC before the security can be sold.
_Source: OpenStax Introduction to Business (CC BY 4.0), Ch 16 "Understanding Financial Management and Securities Markets", section 16.7 Buying and Selling at Securities Exchanges_
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