Investment Chap2

In this paper the main focus will be on the clause of 'Liability to contemporaneous traders for insider trading' which is section 20A in the Securities Exchange Act of 1934. The paper will start off by giving some basic points that make up this section followed by the history and background of the Securities Exchange Act of 1934. The paper will then highlight the major impact that this act has made on the industry in the current global standing. Some of the basic points that make up the subsection 20A clauses include the following:

The field of Finance is the study of fund management and assets allocation over time, in other words, it is the money making industry. Wall Street is the base of the finance field the original home of the stock exchange. In this field, one wears a “suit” meaning a business suit to look successful and well educated. “tie” is the air of intelligence that gives you authority. The people in the finance field are mostly in stock exchange. Peter Lynch quotes “for twenty dollars I can tell you a lot of things, for thirty dollars I can tell you more and for fifty and tell you everything.”1 This quotation includes the fake lie that the stock brokers give you to invest. The more money you give the more lies you get. Therefore, the whole point of a stock broker is to get people to invest, but they cannot do it without opening the eyes of a costumer. This includes telling them a to hard to believe number which potentially can change a client point of view.

Every investment contract that gives the owner evidence of indebtedness or business participation is a security. The Securities Act of 1933 was the first federal law in the United States to regulate the sale of company shares, bonds, and other investment interests. Through meticulous research and reading, this essay will discuss the pertinent aspects of the 1933 Securities Act and specifically discuss the topics of exempt securities and transactions, while also examining the offerings of securities to which each exemption may apply.

This document is authorized for use only by Yen Ting Chen in FInancial Markets and Institutions taught by Nawal Ahmed Boston University from September 2014 to December 2014.

In this paper, I chose to use the investing strategy rather than the trading strategy. The trading strategy is very common in most stock markets as well as the global stock market,. The strategy involves the buying and selling of shares in the stock market. However,

When thinking about financial institutions and how I can implement what I had learned, the first topic that came to mind was stocks, bond, wall street. The thought that there is a lot of money that can be made there peaked my interest ergo, this book written by Peter Lynch was intriguing. Because the amount of knowledge I know about Wall Street is insignificant, the understandings and experience of Mr. Lynch have been useful in my endeavors to acknowledge the rules that make up the trading rooms and actions people make in order to stay ahead of the market. Though this book covers just one opinion of many in the end, his expertise will only benefit partially

‘High Frequency Trading’, defined by Investopedia, a website dedicated to provide financial education as: “… a program trading platform that uses powerful computers to transact a large number of orders at very fast speeds.” It was a phenomenon born thanks to the rising of a new era: the automation era. However, there is no consensus about whether High-Frequency Trading was a positive innovation or a negative disruption, yet, it is obvious for everyone that this technique, and the digitalization of the market in general, have strongly shaped the form of the current stock market.

One of the newest stock exchanges is the NASDAQ, which stands for the National Association of Securities Dealers Automated Quotations. It was the world’s first electronic stock when it was founded in 1971. Now it has trading, clearing, exchange technology, listing, information and public company services from six continents. The Nasdaq has over 3,600 listed companies, a value of approximately $9.6 Trillion and more than 10,000 corporate clients. The technology that is behind the NASDAQ is now used in over 50 countries. It is so widespread that one out of every ten transactions happens in NASDAQ’s security transaction program.

Two of the most commonly used components of the financial markets are money markets and capital markets. The biggest distinguishing factor between these two markets is on the basis to maturity of the securities traded in each market (Mishkin, 2016). Money markets deal with short term debt instruments- less than one year and capital markets deal with debt instruments – typically greater than one year and longer, as well as equity instruments (Mishkin, 2016).

Over-the-counter, or OTC, markets are used to trade securities outside of the formal exchange systems that sell different types of derivatives and unlisted stocks. Smaller companies often have their stocks traded on OTC markets because they are not able to meet the extensive requirements of the formal exchanges. These markets are not subject to the same strict regulations as formal stock exchanges and the companies that use them are not required to be as transparent as larger companies trading on the formal exchanges (“Over-the-counter,” 2016). One of the most important economic functions of over-the-counter markets is that it provides a way for “participants to hedge exposures” and “manage risks” (“Over-the-counter derivatives,” 2013). This fills an important need for businesses that the money markets and stock markets are not able to meet. While they provide a place to unite investors seeking to earn returns and borrowers seeking financing, those markets do not trade instruments that allow businesses to hedge against specific risks and exposures. OTC markets are critical components of the economy that fulfil this need.

The use of derivatives has increased over the recent years because they are an integral part of the economy. They help firms to manage financial risks that threaten revenue, cost of goods sold and various expenses. Derivatives have existed long for centuries and their recorded history dates back to the sixth century, B.C. (Donohoe, 2015). During this time, goods and services were used in the exchange, however, this proved to be difficult because it was hard to coordinate harvest times for different goods all year round. During the 1800s futures were used in the London exchange to protect against price fluctuations. In this paper, I will examine derivative securities, discuss their roles in the financial market and discuss the role of

In the wake of the 2008 financial crisis, the market for initial public offerings (IPOs)

-Money market securities are short-term instruments with an original maturity of less than one year. These securities include Treasury Bills, commercial paper, federal funds, repurchase agreements, negotiable certificates of deposit, banker’s acceptances, and Eurodollars. Money market securities are used to “warehouse” funds until needed. The returns earned on these investments are low due to their low risk and high liquidity.

In addition, by making a general reference to "securities," the prohibition against insider trading appears to cover all types of securities as contemplated under the Law. They include: stocks, bonds, and investment fund units,

The Securities Contract (Regulation) Act, 1956 [SCRA] defines ‘Stock Exchange’ as any body of individuals, whether incorporated or not, constituted for the purpose of assisting, regulating or controlling the business of buying, selling or dealing in securities. Stock exchange could be a regional stock exchange whose area of operation is specified at the time of its recognition or national exchanges, which are permitted to have nationwide trading since inception.