By registering securities under Section 12 b or Section 12 g of the Exchange Act, a company becomes subject to the periodic and current reporting requirements of Section 13 a of the Exchange Act. In addition, Section 15 d companies must file certain periodic reports and information required by Section 13 of the Exchange Act as if they had registered securities under Section The SEC has divided all issuers into four categories for purposes of public securities offerings:. Non-reporting issuers.
Unseasoned issuers. Seasoned issuers. Is grading optional? Is it compulsory for me to fill up the registration form? Is it compulsory for me to have a Demat Account?
Is it possible to enter bids less than floor price? Is the issue price for placement portion and net offer to public the same? Is there any preference while doing the allotment? What are Disclosures and Investor protection guidelines? What are Legal and other information? What are Risk Factors? What are the relevant regulations and where do I find them? What does one mean by Lock-in? What does "price discovery through book building process" mean? What is a Cut Off Price?
What is a draft prospectus? What is a Financial Statements? What is a Follow on Public Offering? What is a Green-shoe Option? What is a Preferential Issue? What is a price band? What is a Red Herring Prospectus? What is a Rights Issue? What is About us? What is an Abridged Prospectus? What is an e-IPO?
What is an Initial Public Offering? What is an Introduction? An issuer is a legal entity that develops, registers and sells securities to finance its operations. Issuers may be corporations, investment trusts , or domestic or foreign governments. Issuers are legally responsible for the obligations of the issue and for reporting financial conditions, material developments and any other operational activities as required by the regulations of their jurisdictions.
Issuers most frequently make available the following types of securities: common and preferred stocks , bonds, notes, debentures, bills and derivatives. Other issuers aggregate funds from a pool of investors to issue mutual fund shares or exchange traded funds ETFs. To illustrate the role of an issuer, imagine ABC Corporation sells common shares to the general public on the market to generate capital to finance its business operations.
This means ABC Corporation is an issuer and is therefore required to file with regulators, such as the Securities and Exchange Commission SEC , disclosing relevant financial information about the company. ABC must also meet any legal obligations or regulations in the jurisdiction where it issued the security. Writers of options are occasionally referred to as issuers of options because they also sell securities on a market.
A non-issuer transaction is one that is not directly or indirectly executed for the benefit of the issuer. Non-issuer transactions refer to any disposition of a security that does not confer a benefit to the issuer company. While the entity that creates and sells a bond or another type of security is referred to as an issuer, the individual who buys the security is an investor.
In some cases, the investor is also referred to as a lender. Essentially, the investor is lending the issuer funds, which are repayable when the bond matures or the stock is sold. As a result, the issuer is also considered to be a borrower, and the investor should carefully examine the borrower's risk of default before buying the security or lending funds to the issuer. Ratings firms such as Standard and Poor's and Moody's create credit ratings for issuers of debt securities, just as credit bureaus create credit profiles and scores for individual consumers.
Rather than being expressed as a number like consumer credit scores, issuer scores are pegged to letters. For example, if an entity has a AAA rating, it has a history of repaying its debts and boasts a very low rate of default.
Conversely, it an entity has a DDD rating, it is in default. Issuers with ratings of BB or below have their bonds labeled as junk, indicating that they pose a high risk of default for investors. Countries also receive credit ratings. However, after the country implemented reforms, cut costs and recapitalized its banks, Standard and Poor's increased its rating to B-, indicating that the company's bonds are a bit safer.
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