covered security

Definition

Securities which are free of state regulations and restrictions. The National Securities Market Improvement Act created this class of securities to standardize the regulations and filings of securities in the United States.

Use covered security in a sentence

It was covered security and that meant that it was free of state regulations, which was good for us and our employees.

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They created the covered security because they would not be limited by state regulations and therefore had more flexibility in issuing them.

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A security which is "blue skied"--that is, does not have any trading restrictions applied to it by an individual state, and is generally free to trade--is also called a covered security.

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