Simple English definitions for legal terms
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Exempt security: A type of collateral that is not subject to certain regulations or requirements. Collateral is something that is given or pledged to guarantee the repayment of a debt. Securities are instruments that represent ownership or creditor rights in a company or government. Examples of securities include stocks, bonds, and options. Exempt securities are those that are exempt from certain regulations, such as registration requirements with the Securities and Exchange Commission.
An exempt security is a type of security that is not subject to certain regulations and requirements that other securities must follow. A security is a type of investment that represents ownership in a company or government entity, or a promise to repay a debt with interest.
For example, a stock is a type of security that represents ownership in a company. A bond is a type of security that represents a promise to repay a debt with interest. However, some securities are exempt from certain regulations, such as registration with the Securities and Exchange Commission (SEC).
One example of an exempt security is a municipal bond. Municipal bonds are issued by state and local governments to fund public projects, such as schools and highways. Because they are issued by government entities, they are exempt from certain SEC regulations.
Another example of an exempt security is a private placement. Private placements are securities that are sold to a small group of investors, rather than the general public. Because they are sold to a limited number of investors, they are exempt from certain SEC regulations.
Overall, exempt securities are a type of security that are not subject to certain regulations and requirements that other securities must follow. Examples include municipal bonds and private placements.