0

From what I understand, the term “security,” as used in finance, refers to equities, debt instruments (such as bonds), and derivatives based on equities and debt. Does the term encompass other financial instruments like currency, commodities, and indices, including derivatives of those assets? What about exotic products based on any underlying asset?

Chris W. Rea
  • 31,999
  • 17
  • 103
  • 191
Xceptional
  • 5
  • 1
  • 3

1 Answers1

1

A good reference to what encompasses "securities" are detailed in the Securities Act of 1933, which was enacted by the United States federal government.

One main exception, which I would still consider securities for your purposes, would be "commercial paper". These are exempt from the securities act because they mature in 270 days of less, but they function much like bonds or promissory notes

Therefore though, it would not encompass currencies and commodities. It really comes down to the structure of the agreement for transferring or holding the particular kind of underlying asset.

CQM
  • 20,209
  • 6
  • 54
  • 93