What is the difference between a registered and unregistered security?

The difference between a registered and unregistered security is the steps a company must take to legally offer the security to the public. A registered security must follow a set of regulations issued by the state and federal government, and must be registered with the Securities and Exchange Commission (SEC). This means that the company has provided the SEC with detailed information regarding their security and the company is open to investigation by the SEC. On the other hand, an unregistered security does not have to follow the regulations and is not registered with the SEC. In Virginia, companies offering a security must file what’s known as a Blue Sky Form with the Virginia State Corporation Commission (SCC). This is a form that outlines the company and the security being offered. A company must also provide additional documents such as an offering memorandum and prospectus detailing the security and the risks associated with it. If the security is not registered with the SEC, the company must have a reasonable basis for believing that the security is exempt from registration. It is important to understand the difference between registered and unregistered securities for the purpose of investment fraud law in Virginia. Failing to register a security with the SEC and provide the required documents may be considered a violation of the law, and individuals may be liable for any losses incurred as a result. If you have any questions about investment fraud law in Virginia, it is wise to contact a qualified attorney.

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What is the difference between a registered and unregistered security?

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