Securities Act of 1933
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| Long title | An act to provide full and fair disclosure of the character of securities sold in interstate and foreign commerce and through the mails, and to prevent frauds in the sale thereof, and for other purposes. |
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| Nicknames | Securities Act 1933 Act '33 Act |
| Enacted by | the 73rd United States Congress |
| Effective | May 27, 1933 |
| Citations | |
| Public law | Pub.L. 73–22 |
| Statutes at Large | 48 Stat. 74 |
| Codification | |
| U.S.C. sections created | 15 U.S.C. § 77a et seq. |
| Legislative history | |
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The United States Congress enacted the Securities Act of 1933 (the 1933 Act, the Securities Act, the Truth in Securities Act, the Federal Securities Act, or the '33 Act, Title I of Pub. L. 73-22, 48 Stat. 74, enacted May 27, 1933, codified at 15 U.S.C. § 77a et seq.), in the aftermath of the and during the ensuing Great Depression. Legislated pursuant to the interstate commerce clause of the Constitution, it requires that any offer or sale of securities using the means and instrumentalities of interstate commerce be registered with the SEC pursuant to the 1933 Act, unless an exemption from registration exists under the law. "Means and instrumentalities of interstate commerce" is extremely broad, and it is virtually impossible to avoid the operation of this statute by attempting to offer or sell a security without using an "instrumentality" of interstate commerce. Any use of a telephone, for example, or the mails, would probably be enough to subject the transaction to the statute.
The 1933 Act was the first major federal legislation to regulate the offer and sale of securities. Prior to the Act, regulation of securities was chiefly governed by state laws, commonly referred to as blue sky laws. When Congress enacted the 1933 Act, it left existing state securities laws ("blue sky laws") in place. The '33 Act is based upon a philosophy of disclosure, meaning that the goal of the law is to require issuers to fully disclose all material information that a reasonable shareholder would require in order to make up his or her mind about the potential investment. This is very different from the philosophy of the blue sky laws, which generally impose so-called "merit reviews." Blue sky laws often impose very specific, qualitative requirements on offerings, and if a company does not meet the requirements in that state then it simply will not be allowed to do a registered offering there, no matter how fully its faults are disclosed in the prospectus. Recently, however, the National Securities Markets Improvement Act of 1996 added a new Section 18 to the '33 Act which preempts blue sky law merit review of certain kinds of offerings.
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