Covered Security

It’s time we all had an important conversation about the Investment Company Act of 1940.

Back before we got tangled up against emperors and Axis powers, the U.S. Congress passed a law that standardized stock security rules and filings according to Federal law.

So, just so you know, “covered securities” are “Federal covered securities.”

Under this rule, the Securities and Exchange Commission defined security regulation under Federal jurisdiction rather than forcing companies to register with individual states. Covered securities like stocks and options have permission from the SEC to list on U.S. stock exchanges.