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 Montana, securities are regulated by the Montana Securities Act, which is designed to protect investors from fraud and ensure fair and equitable practices in the securities market. The Act requires the registration of securities offerings, broker-dealers, investment advisers, and their representatives. It also includes provisions for the disclosure of information to investors and prohibits fraudulent and manipulative practices. The Montana State Auditor's Office, through the Securities Department, administers these regulations. Additionally, federal laws such as the Securities Act of 1933 and the Securities Exchange Act of 1934, enforced by the U.S. Securities and Exchange Commission (SEC), also apply to securities transactions in Montana. These federal laws require the registration of securities, regulate the securities industry, and aim to protect investors by ensuring that they have access to significant information about securities being offered for public sale, and by prohibiting deceit, misrepresentations, and other fraud in the securities market.