Non-Covered Security

AAA

DEFINITION of 'Non-Covered Security'

A proposed SEC designation under which securities offerings that are small and of limited scope would not be covered by Regulation D. The new designation would be created under the Restoring American Financial Stability Act of 2010 proposed by Connecticut Senator Christopher Dodd. The provision is decried by small business advocates who argue that the new designation would make it much more difficult for small firms to obtain early-stage financing from angel investors.

INVESTOPEDIA EXPLAINS 'Non-Covered Security'

Regulation D provides an exemption from complex securities registration requirements. This exemption is frequently used by early-stage firms who raise money from small groups of savvy accredited investors. Under the bill, the SEC would be required to make a determination on whether to designate a class of non-covered securities that would be unable to use Regulation D. The bill outlines that in making such a designation, the SEC should consider the size of the offering, the number of States in which the securities is being offered and the nature of the persons to whom the security is being offered.

RELATED TERMS
  1. Accredited Investor

    A term used by the Securities and Exchange Commission (SEC) under ...
  2. Angel Investor

    An investor who provides financial backing for small startups ...
  3. Venture Capital

    Money provided by investors to startup firms and small businesses ...
  4. Regulation D - Reg D

    A Securities and Exchange Commission (SEC) regulation governing ...
  5. Seed Capital

    The initial capital used to start a business. Seed capital often ...
  6. Series A Financing

    The first round of financing undergone for a new business venture ...
Related Articles
  1. Fundamental Analysis

    Cashing In On The Venture Capital Cycle

    Find out how VC firms make the market go round, and round and round.
  2. Options & Futures

    When Your Business Needs Money: Angel Investors

    If you have a promising business that needs a boost, you may be able to put your faith in these wealthy investors.
  3. Nearly all IPOs have some sort of lock-up period
    Investing Basics

    IPO Lock-Ups Stop Insider Selling

    Ownership plays a key role when companies go public. Find out how.
  4. Personal Finance

    Seek An Adventure In Venture Capital

    Make a career out of chasing down the "next big thing".
  5. Entrepreneurship

    Top 9 Venture Capital Interview Questions

    Ace your interview by learning how to break down the most common questions asked.
  6. The mission of the SEC is to enforce securities laws.
    Investing

    What's the SEC?

    The Securities and Exchange Commission (SEC) is an independent agency of the United States government. The mission of the SEC is to enforce securities laws passed by congress. These laws aim ...
  7. You may owe money, but you still have rights. There's a long list of things debt collectors are banned from doing to you. Know what's illegal.
    Credit & Loans

    5 Things Debt Collectors Can't Do To You

    You may owe money, but you still have rights. There's a long list of things debt collectors are banned from doing to you. Know what's illegal.
  8. Mutual Funds & ETFs

    What is the difference between a hedge fund and a private equity fund?

    Learn the primary differences between hedge funds and private equity funds, both of which are utilized by high net worth investors.
  9. Sounds like a bad horror movie, but it really could happen to you. Here's how to identify zombie debt and send collectors back to the dead-debt graveyard.
    Credit & Loans

    How To Beat Off A Zombie Debt Collector

    Sounds like a bad horror movie, but it really could happen to you. Here's how to identify zombie debt and send collectors back to the dead-debt graveyard.
  10. Understanding how the debt collection business works will give you a better chance of coming out ahead if you ever have to tangle with a collection agent.
    Credit & Loans

    Inside Secrets Of The Debt Collection Business

    Understanding how the debt collection business works will give you a better chance of coming out ahead if you ever have to tangle with a collection agent.

You May Also Like

Hot Definitions
  1. Deferred Revenue

    Advance payments or unearned revenue, recorded on the recipient's balance sheet as a liability, until the services have been ...
  2. Multinational Corporation - MNC

    A corporation that has its facilities and other assets in at least one country other than its home country. Such companies ...
  3. SWOT Analysis

    A tool that identifies the strengths, weaknesses, opportunities and threats of an organization. Specifically, SWOT is a basic, ...
  4. Simple Interest

    A quick method of calculating the interest charge on a loan. Simple interest is determined by multiplying the interest rate ...
  5. Special Administrative Region - SAR

    Unique geographical areas with a high degree of autonomy set up by the People's Republic of China. The Special Administrative ...
  6. Annual Percentage Rate - APR

    The annual rate that is charged for borrowing (or made by investing), expressed as a single percentage number that represents ...
Trading Center