Assessable Security

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DEFINITION of 'Assessable Security'

A type of stock that companies issued to investors at a discount to its face value in exchange for the right to come back for more money at a later date. Assessable securities cannot be assessed for more than the difference between the purchase price and face value. In other words, if you bought an assessable stock with a face value of $20 for just $2, the company might later ask you for another $18 if it needed more money. Under Rule 136 of the Securities Act of 1933, the issuing company could resell the stock if the holder did not pay the assessment.

INVESTOPEDIA EXPLAINS 'Assessable Security'

Assessable stock has not been traded or issued in the United States for decades, but assessable stock is still a topic on the Series 63 exam. Exam takers are required to know that a gift of assessable stock is considered a sale. Today, all securities are non-assessable, and if companies need to raise more money, they issue additional stock or bonds.

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