Tiêu đề Freedom Edition_ Treasury Direct.pdf ✅

Freedom Edition: Treasury Direct By Paths2frdm Director: Caleb Holt©
In order to understand what the Treasury Direct system is we must 1st understand our role in it and how it is meant to operate. To put it simply we are investors who are eligible to trade securities on the primary and secondary markets. Laws That Govern the Securities Industry In order to better help understand our position we must 1st familiarize ourselves with the laws that govern the securities industry. Lets begin with the Securities Act of 1933 also known as the truth in securities law. It answers the most basic question of all, “what is a security?” A security is any note, stock, treasury stock, security future, security-based swap, bond, debenture, evidence of indebtedness, certificate of interest or participation in any profit-sharing agreement, collateral-trust certificate, preorganization certificate or subscription, transferable share, investment contract, etc. The Securities Act of 1933 has two basic objectives the 1st being a requirement that investors receive financial and other significant information concerning securities being offered for public sale; and also to prohibit deceit, misrepresentations, and other fraud in the sale of securities. This was a necessity back then just as much as it is today because if you are at this point you should have a good understanding of all the misrepresentation and lack of other education on matters of significant information that we as investors need. To help accomplish these goals in general, securities sold in the U.S. must be registered. The registration forms companies file provide essential facts while minimizing the burden and expense of complying with the law. Registration statements and prospectuses become public shortly after filing with the SEC. If filed by U.S. domestic companies, the statements are available on the EDGAR database accessible at www.sec.gov. Registration statements are subject to examination for compliance with disclosure requirements. This information enables investors, not the government, to make informed judgments about whether to purchase a company's securities. While the SEC requires that the information provided be accurate, it does not guarantee it. This is why we must hold them to their filings. Investors who purchase securities and suffer losses have important recovery rights if they can prove that there was incomplete or inaccurate disclosure of important information. Not all offerings of securities must be registered with the Commission. By exempting many small offerings from the registration process, the SEC seeks to foster capital formation by lowering the cost of offering securities to the public. Next up is the Securities Exchange Act of 1934. With this Act, Congress created the Securities and Exchange Commission. The Act empowers the SEC with broad authority over all aspects of the securities industry. This includes the power to register, regulate, and oversee brokerage firms, transfer agents, and clearing agencies as well as the nation's securities self regulatory organizations (SROs). The various securities exchanges, such as the New York
Stock Exchange, the NASDAQ Stock Market, and the Chicago Board of Options are SROs. The Financial Industry Regulatory Authority (FINRA) is also an SRO. SROs must create rules that allow for disciplining members for improper conduct and for establishing measures to ensure market integrity and investor protection. SRO proposed rules are subject to SEC review and published to solicit public comment. While many SRO proposed rules are effective upon filing, some are subject to SEC approval before they can go into effect. The Act also identifies and prohibits certain types of conduct in the markets and provides the Commission with disciplinary powers over regulated entities and persons associated with them.The Act also empowers the SEC to require periodic reporting of information by companies with publicly traded securities. For example companies with more than $10 million in assets whose securities are held by more than 500 owners must file annual and other periodic reports. These are the 10k and 8k forms. These reports are available to the public through the SEC's EDGAR database. The Securities Exchange Act also governs the disclosure in materials used to solicit shareholders' votes in annual or special meetings held for the election of directors and the approval of other corporate action. This information, contained in proxy materials, must be filed with the Commission in advance of any solicitation to ensure compliance with the disclosure rules. Solicitations, whether by management or shareholder groups, must disclose all important facts concerning the issues on which holders are asked to vote. The securities laws broadly prohibit fraudulent activities of any kind in connection with the offer, purchase, or sale of securities. These provisions are the basis for many types of disciplinary actions, including actions against fraudulent insider trading. Insider trading is illegal when a person trades a security while in possession of material nonpublic information in violation of a duty to withhold the information or refrain from trading. The last Act I would like to touch on is the Trust Indenture Act of 1939 This Act applies to debt securities such as bonds, debentures, and notes that are offered for public sale. Even though such securities may be registered under the Securities Act, they may not be offered for sale to the public unless a formal agreement between the issuer of bonds and the bondholder, known as the trust indenture, conforms to the standards of this Act. This is why every company we deal with has a trust indenture agreement otherwise they would not be able to operate in the same capacity. These laws will be essential to your understanding of what the system is and how to operate within it. I suggest you read them all the way through to further supplement your understanding of the material. Primary and Secondary Markets
The primary market is a source of new securities. Often on an exchange, it's where companies, governments, and other groups go to obtain financing through debt-based or equity-based securities. For the primary market it's important to remember: ● In the primary market, new stocks and bonds are sold to the public for the first time. ● In a primary market, investors are able to purchase securities directly from the issuer. ● After they’ve been issued on the primary market, securities are traded between investors on what is called the secondary market—essentially, the familiar stock exchanges. The primary market is where securities are created. It's in this market that firms sell or “float” new stocks and bonds to the public for the first time. All issues on the primary market are subject to strict regulation. Companies must file statements with the Securities and Exchange Commission (SEC) and other securities agencies and must wait until their filings are approved before they can offer them for sale to investors. Take, for example, U.S. Treasuries—the bonds, bills, and notes issued by the U.S. government. The Dept. of the Treasury announces new issues of these debt securities at periodic intervals and sells them at auctions, which are held multiple times throughout the year. This is an example of the primary market in action. Now, let's say some of the investors who bought some of the government's bonds or bills at these auctions—they're usually institutional investors, like brokerages, banks, pension funds, or investment funds—want to sell them. They offer them on stock exchanges or markets like the NYSE, Nasdaq, or over-the-counter (OTC), where other investors can buy them. These U.S. Treasuries are now on the secondary market. The secondary market is where investors buy and sell securities. Trades take place on the secondary market between other investors and traders rather than from the companies that issue the securities. People typically associate the secondary market with the stock market. National exchanges, such as the New York Stock Exchange (NYSE) and the NASDAQ, are secondary markets. The secondary market is where securities are traded after they are put up for sale on the primary market. The secondary market provides investors and traders with a place to trade securities after they are put up for sale on the primary market. Investors trade securities on the secondary market with one another rather than with the issuing entity. Through a massive series of independent yet interconnected trades, the secondary market drives the price of securities toward their actual value. The secondary market provides liquidity to the financial system and allows smaller traders to participate. The stock market and over-the-counter markets are types of secondary markets. As noted above, securities are bought and sold by investors among one another on the secondary market after they are first sold on the primary market. As such, most people call the secondary market the stock market. Transactions that occur on the secondary market are termed secondary simply because they are one step removed from the