Investment Securities

| November 5, 2011

Investment securities are certificates or documents that indicate that you have an interest in a business or have lent money to a company or a government entity. Investment Securities involves the regulation of transactions and entities engaged in the establishment and exchange of securities. Securities includes the exchange of stocks, bonds, forwards, futures, options, bonds, mutual funds, IRA’s and 401K, the list goes on of what is considered an investment security. The regulating body for securities within the United States is known as the Securities and Exchange Commission (SEC), they execute regulations to protect investors engaged in the exchange of securities. Examples of protective regulation by the SEC include: requirements that companies disclose the holdings of their corporate officials; rules involving the exchange, selling short, and all aspects of trading; and rules governing investment counseling, in addition, the brokerage industry is self policed by Self Regulatory Organizations (SROs), such as FINRA (the Financial Industry Regulatory Authority), formerly the National Association of Securities Dealers (NASD). There are a few licenses that one would need to sell and/ or council an individual for investment securities, the main one is called the series 7, which allows them to sell just about every investment and they need a series 63 which allows a person to sell to certain states, if an individual wishes to invest with a firm and/or broker, they should do a search through the FINRA to look into their background.

A huge issue with investment securities is fraud, there are several types, there is corporate fraud, insider trading, microcap fraud, accountant fraud, mutual Fund fraud, short selling abuses and ponzi schemes, all of these are serious offenses and will result in prison time and large fines, the SEC does not take to securities fraud lightly, as of last year the securities regulators had an estimated 30 billion dollars in securities fraud, a study conducted by the NYSE in the 90’s shows approximately 50 million people owned some type of securities, while over 100 million individuals owned securities indirectly. These financial markets provide the opportunity for wealth and the opportunity for criminals to take advantage of investors that don�t know any better to keep an eye out for this sort of thing.

There are 20 major securities exchanges in the world, the largest is the New York Stock Exchange, the market value in millions is close to $11,000,000, the others are the Tokyo Stock Exchange, NASDAQ, Euronext, London Stock Exchange, Shanghai Stock Exchange, Hong Kong Stock Exchange, Toronto Stock Exchange, Frankfurt Stock Exchange, Madrid Stock Exchange, Bombay Stock Exchange, Australian Securities Exchange, Sao Paulo Stock Exchange, National Stock Exchange of India, Swiss Exchange, Nordic Stock Exchange Group OMX1, Korea Exchange, Johannesburg Securities Exchange, Milan Stock Exchange and the Shenzhen Stock Exchange, if a brokerage firm wants a seat on the exchange they have to pay around 5 million dollars for one seat on the exchange.

Investment securities is a range of various investment�s as I mentioned a few earlier on, I would advise people to do extensive research in the securities, brokerage firm and all of the laws before you purchase any investment securities, there are no guarantees in investment securities, the sky is the limit or you can lose everything.

Category: Investment

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