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 Massachusetts, securities are regulated by both state and federal law. The Massachusetts Securities Division is responsible for enforcing the state's securities laws, which are outlined in the Massachusetts Uniform Securities Act (Chapter 110A of the General Laws of Massachusetts). This Act governs the registration of securities, the registration and oversight of broker-dealers, agents, investment advisers, and investment adviser representatives, as well as the conduct of securities transactions within the state. It requires disclosure of material information to investors and prohibits fraudulent practices in the sale of securities. At the federal level, the Securities and Exchange Commission (SEC) regulates securities transactions under various laws including the Securities Act of 1933 and the Securities Exchange Act of 1934, which aim to protect investors by ensuring that securities are sold in a fair and truthful manner and that markets are efficient, fair, and transparent. These laws require the registration of securities, regulate the securities industry and its participants, and enforce compliance with federal securities laws.