A security is a financial asset that can be bought and sold—including stocks, bonds, debentures, municipal securities, futures, and options—and a securities transaction involves the purchase, sale, redemption, or other transfer of a security.
In Colorado, securities are regulated by both state and federal laws. The Colorado Securities Act (CSA) governs the registration, sale, and offering of securities within the state. Under the CSA, securities must be registered before they are offered or sold, unless they qualify for an exemption. The Act also requires the registration of brokers, dealers, and investment advisers who conduct securities transactions in the state. Additionally, the CSA prohibits fraudulent and deceptive practices in connection with the purchase or sale of securities. At the federal level, the Securities and Exchange Commission (SEC) regulates securities transactions nationwide, enforcing laws such as the Securities Act of 1933 and the Securities Exchange Act of 1934. These federal laws mandate the disclosure of important financial information through the registration of securities, regulate the transactions of securities professionals, and outline penalties for fraudulent activities. Both state and federal regulations are designed to protect investors and maintain fair, orderly, and efficient markets.