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MIAMI A
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LSDefine
Simple English definitions for legal terms
registered security
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A quick definition of registered security:
A registered security is something that shows you own a part of a company or government and have certain rights because of it. It could be a piece of paper that says you loaned money to the company or that you own a small part of it. It's different from other things you might buy because it doesn't have value on its own, but instead represents something else.
A more thorough explanation:
A registered security is a type of investment that represents ownership or creditor rights in a company or government. It is a type of collateral that guarantees repayment of money or credit extended to a debtor.
Examples of registered securities include:
- Stocks: These represent ownership in a company and give the holder the right to vote on company decisions.
- Bonds: These represent a loan to a company or government and pay interest to the holder.
- Options: These give the holder the right to buy or sell a security at a certain price.
Registered securities have no intrinsic value on their own, but their value depends on the financial condition and prospects of the company or government that issued them. The value of a stock, for example, depends on the profitability and future prospects of the company.