DEFINITION of 'Non-Security'

A type of investment that is not as freely marketable or transferable as a security. Unlike a security, a non-security does not require the backing of an underwriter or bank, and involves much less documentation and paperwork. This lack of underwriting reduces the vehicle's liquidity and makes exchanging it between parties more difficult. Non-security investments could still hold value, but will not be quoted on any stock exchange or organized financial market.

BREAKING DOWN 'Non-Security'

A security is an instrument representing a freely transferable and salable investment, which includes the risk of loss in value. Securities include assets such as stocks, mutual funds, government bonds and debentures. Non-securities include assets such as art, rare coins, baseball cards, life insurance, physical gold, diamonds and bank guarantees. Individual Retirement Accounts (IRAs) restrict some investments with this classification.

  1. Security

    A financial instrument that represents an ownership position ...
  2. Stock

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  3. Traditional IRA

    An individual retirement account (IRA) that allows individuals ...
  4. Individual Retirement Account - ...

    An investing tool used by individuals to earn and earmark funds ...

    A unit of ownership interest in a corporation or financial asset. ...
  6. Hedge

    Making an investment to reduce the risk of adverse price movements ...
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