A legend is a short description of a securities transaction that is used to help the investor understand the nature of the transaction. The legend will typically include the name of the security, the date of the transaction, the type of transaction, the price of the security, and the number of shares traded.
What is legend removal?
The SEC (Securities and Exchange Commission) is a US federal government agency that is responsible for regulating the securities industry. One of the SEC's duties is to remove "false and misleading" legends from securities. A legend is a notice that is printed on a security that describes certain restrictions on the security. For example, a legend may state that the security cannot be sold or transferred without the approval of the SEC.
The SEC may remove a legend from a security for several reasons. One reason is if the security has been registered with the SEC. Once a security is registered, the restrictions that are described in the legend are no longer applicable. Another reason is if the security has been cleared by a securities clearinghouse. A clearinghouse is an organization that helps to facilitate the buying and selling of securities.
The SEC may also remove a legend from a security if the issuer of the security requests that the legend be removed. The issuer is the company or other entity that created the security. The SEC will only remove a legend if it finds that the removal of the legend would not be misleading to investors.
The SEC may also remove a legend from a security if the security is being offered for sale in a secondary market. A secondary market is a market where securities are bought and sold by investors, rather than by the issuer. The SEC may find that the legend is no longer needed in the secondary market and that removing the legend would not be misleading to investors.
What is a 33 ACT legend? There is no such thing as a "33 ACT legend." The Securities Exchange Act of 1934 (the "Exchange Act") was enacted by Congress in 1934 in response to the stock market crash of 1929 and the resulting Great Depression. The Exchange Act created the Securities and Exchange Commission (the "SEC") to regulate the securities markets and protect investors. The Exchange Act requires, among other things, that companies that want to sell securities to the public must register with the SEC.
The Exchange Act also requires companies that are already public (i.e., companies that have already sold securities to the public) to file periodic reports with the SEC. These periodic reports must disclose, among other things, information about the company's financial condition and its management.
The term "legend" is often used to refer to the disclosures that are required to be included in these periodic reports. For example, the front page of a company's 10-K report must include a legend disclosing the company's transfer agent and dividend reinvestment plan.
Can unregistered stock be sold?
According to the Securities and Exchange Commission (SEC), unregistered stock cannot be sold unless it meets certain conditions. For example, the stock must be registered with the SEC if it is being sold to the public. If the stock is being sold to a limited number of people, it may be exempt from registration. However, the stock must still meet certain requirements, such as being listed on a national securities exchange.
What is a broker Rep letter? A broker Rep letter is a document that is required by the SEC when a broker-dealer registers with them. The letter is written by a registered representative of the broker-dealer and it gives information about the representative's experience and qualifications.
What is Rule 405 of the Securities Act?
Rule 405 of the Securities Act of 1933 prohibits the use of "general solicitations" and "general advertising" in connection with the offer or sale of securities. This means that issuers cannot use mass media to reach potential investors and solicit their investment. Instead, issuers must use a more traditional, private placement method to raise capital.
The rationale behind this rule is to protect investors from being bombarded with unsolicited and potentially misleading marketing materials. By restricting the use of general solicitations and advertising, the SEC hopes to encourage issuers to take more time to get to know potential investors and to only offer securities to those investors that they believe to be a good fit.