Assessment

Finance a la shmoop what are exempt securities and exempt transactions? well

the first thing that should strike you is that in both of these cases they are [Man on stage giving a speech]

no longer emp'd okay crickets eggs empt.. no okay all right we try you know no

extra charge here we try all right well a security is exempt from regulation if

it lives outside of or doesn't need to meet the various registration

requirements of the Securities Act of 1933 right like it's exempt from

regulation and remember that Act it was built to protect average joe's and

Josie's from farmland to urban land so that fast-talking city slickers didn't

get them to invest their hard-earned money in things that had no more value [Average Joe and Josie's money transfers to city slickers]

than "the blue sky above them" remember that judge said that on

the blue sky laws yeah it's that act well if you want to raise public money

from American investors in America well your security is by default not exempt

from regulation and you have to go through all the dance steps demanded by

the regulators to raise money here so what kind of security would live outside

of the 33 act? well something that is insured by the government our government

if it's insured by a Somalian warlord.com well then that doesn't count it's [Somalian soldiers appears]

not exempt well the quick list of normally exempt securities here we go

it's these government or government institutions banks or depository

institutions insurance companies authorized to do business in the state

railroads and public utility securities options or warrant and there for big

boys and girls only employee benefit plans equipment trust certificates and

nonprofit corporations like intentionally nonprofit ones not like

just bad companies who never make a real profit all right well the idea here

generally is that these securities are less of a risk for investors so the SEC

doesn't really have to get involved you can just invest in them and

you know things normally are boringly just fine all right well the same vibe [Man discussing securities]

applies to exempt transactions an exempt transaction is one that doesn't

have to meet all the registration requirements of the Uniform Securities

Act or the SEC and the idea here is that every transaction creates a whole lot of

paperwork and there are just some cases where all the hassle isn't needed as [Paper work stacks up on man's desk]

long as you're trading small amounts of stocks or doing small investments in

known entities that are generally considered legal well then your

transaction is considered exempt and then there's a whole lot less paperwork [Paperwork disappears and man jumps up]

which is a good thing and yeah that's worth celebrating