Securities Act of 1933

Published: | Updated: May 5, 2018

Definition - What does Securities Act of 1933 mean?

The Securities Act of 1933 is a law that was passed in Congress to increase transparency in securities trading and decrease fraud and misrepresentation.

Insuranceopedia explains Securities Act of 1933

The Securities Act requires companies that wish to deal in securities to register with the Securities and Exchange Commission. It also requires them to post pertinent information to guide potential investors. The law, essentially, makes it easier for investors to become well informed about a company before investing in it.

This act was motivated by the Stock Market Crash of 1929. That economic catastrophe led to a bigger one: the Great Depression of the 1930s. Prior to the legislation, securities were governed by statutory laws, but the economic upheavals at the beginning of that decade prompted Congress to enact a federal law governing them.

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