Question

When a firm markets new securities, a preliminary registration statement must be filed with

A) the exchange on which the security will be listed.
B) the Securities and Exchange Commission.
C) the Federal Reserve.
D) all other companies in the same line of business.
E) the Federal Deposit Insurance Corporation.

Answer 1

B) the Securities and Exchange Commission.

Step-by-step explanation:

The securities and exchange commission is a regulatory body that protects investors in the securities markets, ensure markets are efficient, and facilitate capital formation.

They require all trades of new shares to be registered with them.

So if a business is issuing any new shares that is intended to traded on the primary market they must be registered with the SEC.

Subsequent sales on the secondary market is for shares already registered with the SEC.

Answer 2

B) the Securities and Exchange Commission.

Step-by-step explanation:

Securities and Exchange Commission (SEC) is a governmental agency saddled with the sole responsibility of regulating the securities or capital markets, as well as protecting investors in a country.

In the U.S, the Securities and Exchange Commission (SEC) as an independent government agency was established under the Securities Act of 1933 and the Securities and Exchange Act of 1934 of the United States of America.

Hence, SEC has the power to propose securities rules and regulations, and enforce federal securities law in the securities market. Therefore, when a firm markets new securities, a preliminary registration statement must be filed with the Securities and Exchange Commission.