Practice Quiz

Paralegal Exam Prep

Category - Legal Envrmt

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Which federal securities law regulates debt securities?
  1. Securities and Exchange Act of 1954
  2. Trust Indenture Act of 1939
  3. Clayton Debt Securities Act of 1943
  4. Investment Company Act of 1940
  5. Investment Advisors Act of 1940
Explanation
Answer: B. The Trust Indenture Act of 1939 regulates debt securities. It prohibits bond issues valued at over $5 million from being offered for sale without a formal written agreement known as an indenture. It also requires that a trustee be appointed for all bond issues to protect the rights of bondholders.
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