The Securities Act of 1933 ("Truth in Securities Act") was enacted after the 1929 crash to restore investor confidence. Its two core mandates:
1. Registration — issuers must file a registration statement (including a prospectus) with the SEC before publicly offering securities. 2. Disclosure — investors must receive material information to make informed decisions.
Key concepts:
| Concept | Detail | |---|---| | Effective date | Registration becomes effective 20 calendar days after filing (unless accelerated by SEC) | | Prospectus | Primary disclosure document delivered to investors | | Tombstone ad | Factual "announcement" permitted before effective date; not an offer | | Cooling-off period | Period between filing and effectiveness; no sales allowed | | Blue-sky laws | State securities laws that work alongside the 1933 Act |
Exempt securities (don't need to register): U.S. government/agency bonds, municipal bonds, commercial paper (≤270 days), bank securities, non-profit securities.
Exempt transactions (securities themselves aren't exempt, but transactions are): Reg D private placements, Reg A+ (mini-IPOs), Rule 144 (resale of restricted securities), intrastate offerings (Rule 147).
> Exam tip: The 1933 Act governs the primary market (new issues). The 1934 Act governs the secondary market and broker-dealers. Knowing which act applies to a scenario is a frequent test question on the SIE, Series 7, and Series 65/66.