Securities law (or Capital Markets law) is the group of laws and regulations that govern the issuance of securities. Security is a financial instrument usually designed to raise money for business from investors in the business. Securities law dictates what a corporation has to do in order to offer their investment to the public. The laws exist in order to make sure that public investments are fair to everyone who might invest in the company.
What is security?
Security is a financial investment. Usually, a corporation offers security in order to raise capital for their business. A stock is an example of security. Bonds, mortgages, and loan packages may also be securities. Securities are a way of financing a business enterprise or making an investment in a business.
The investors who buy security hope to profit from the transaction. The corporations that sell securities want to raise money. Securities are an important part of the business. Security laws ensure that this aspect of business operates fairly to all involved in the buying and selling of securities. Most securities are public offerings, but security may also be private with a limited group of investors.