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 Tennessee, securities are regulated by both state and federal laws. The Tennessee Securities Act of 1980 governs the registration, sale, and offering of securities within the state. This Act requires that securities offered or sold in Tennessee must be registered unless they qualify for an exemption. The Act also mandates the registration of brokers, dealers, investment advisers, and their representatives who conduct securities business in the state. Additionally, the Act prohibits fraudulent and other unlawful practices in connection with the offer, sale, or purchase of securities. At the federal level, the Securities and Exchange Commission (SEC) regulates securities transactions nationwide under the Securities Act of 1933 and the Securities Exchange Act of 1934, among other laws. These federal laws require the registration of securities, regulate the securities industry, and aim to protect investors from fraudulent activities. Both state and federal laws provide mechanisms for enforcement, including penalties for violations, and aim to ensure transparency and fairness in the securities market.