Textbook Notes (362,796)
Canada (158,054)
MGSC30H3 (57)
H Laurence (33)
Chapter 18

Chapter 18 Notes

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University of Toronto Scarborough
Management (MGS)
H Laurence

Chapter 18 Securities Regulation NotesWhat is a Security y a security is an openended term for the purposes of regulation y the vast majority of securities that will be encountered in public capital markets will be listed securities made up primarily of government bonds corporate shares and bonds debentures futures options derivatives and units of ownership in mutual funds and similar income trusts Purpose and Administration of Securities Regulation y the principles of efficiency and integrity can be more fully stated as the two chief goals of 1 providing protection to investors from unfair improper or fraudulent practices 2 fostering fair and efficient capital markets and confidence in capital markets Disclosure y disclosurethe release to the public of information about a corporation that intends to offer its securities to the public y the first principle relates to the availability of information pertinent to the security at the time of original issuance which affects the first investors desire to purchase the security at all as well as the price that he or she is willing to pay for it y this process of disclosure is known as prospectus disclosure and involves the creation of an omnibus public document stating detailed particulars about the issuer and the security y the second principle relates to material facts or changes in business that affect the security after issuance and purchase during its lifespan or term to maturity which is known as continuous disclosure Prospectus Disclosure y prospectusa public document required by law before securities are issued revealing material facts about that security and its issuer with such true full and plain disclosure that a potential investor may make an informed decision as to the riskiness and price Insider Trading y insider tradingthe trading in shares of a corporation by a person in a corporation who possesses undisclosed privileged information about th
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