- The Federal Securities Act replaced the Federal Trade Commission with the Securities and Exchange Commission, a five-member panel dedicated to the regulation of exchange practices and the publication of stock prospectuses.
- Under the Federal Securities Act, securities offered to the public must include a description of the security offered and information about the management of the issuer. Furthermore, independent accountants must certify the financial statements of the issuer.
- Certain types of securities are exempt from these strict regulation requirements. Exemptions are made for: securities that are private offerings to a limited and specific group of private individuals or institutions; offerings of limited size; offerings within one state; and offerings made by a federal, state or municipal government.
- Regulation S defines when foreign issuers may be exempt from registration requirements. No exemption is granted where there is a substantial U.S. market interest, or where sales will be made to U.S. citizens.
- Rule 144 allows the sale of restricted and controlled securities without registration, but only under certain, limited circumstances.
- Justice Louis Brandeis, a staunch supporter of the Federal Securities Act, famously remarked that "sunshine is the best disinfectant."
