Security (finance)
Tradable financial asset
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Form 144 (4) · Securities (4) · SEC filing (3) · SEC Filing (2) · Insider trading (2) · BlackRock (1) · Securities trading (1) · Asset management (1) · Stock divestment (1) · Market transparency (1) · Box Inc (1) · Insider Trading (1) · SaaS (1) · Stock Market (1) · Roivant Sciences (1) · Stock sale (1) · Capital markets (1) · East West Bancorp (1) · Stock market (1) · Financial disclosure (1)
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# Security (Finance)
A **security** is a fungible, negotiable financial instrument that holds some type of monetary value. It represents an ownership position in a publicly-traded corporation (via stock), a creditor relationship with a governmental body or a corporation (represented by owning that entity's bond), or rights to ownership as represented by an option.
### Definition and Scope
While the term broadly refers to any form of financial asset that can be traded, its precise legal classification varies significantly by jurisdiction:
* **General Context:** In common usage and across various languages, "security" is often used as a synonym for any financial instrument.
* **Legal Regulatory Frameworks:** The formal definition is governed by specific local statutes. In many regulatory regimes, the classification of an asset as a security is critical, as it determines whether the instrument is subject to specific oversight, disclosure requirements, and trading laws.
### Primary Classifications
Securities are generally categorized into three main types:
1. **Equity Securities:** Represent ownership interest held by shareholders in an entity (e.g., common stocks).
2. **Debt Securities:** Represent money that is borrowed and must be repaid, with terms that stipulate the size of the loan, interest rate, and maturity date (e.g., bonds, certificates of deposit).
3. **Hybrid Securities:** Combine elements of both debt and equity (e.g., equity warrants, convertible bonds).
### Jurisdictional Variations
The underlying legal and regulatory definitions may be narrower than the colloquial use of the term. For instance, in the United States, the "Howey Test" is often applied by the Supreme Court to determine whether a transaction qualifies as an "investment contract" and, therefore, a security under the Securities Act of 1933.
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- 🌐 Insider trading (3 shared articles)
- 🌐 Digital asset (1 shared articles)
- 🌐 Regulatory compliance (1 shared articles)
- 🏢 East West Bancorp (1 shared articles)
- 🌐 Stock market (1 shared articles)
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- 🏢 BlackRock (1 shared articles)
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- 🌐 Software as a service (1 shared articles)