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A capital market is a securities market (debt or equity) where commercial enterprises & governments can raise long-term funds. What makes it different from the money market  (where short-term funds are normally raised) is that it provides funds-seekers with an opportunity to raise money for periods exceeding one year. A capital market is usually divided into the stock market (equity securities) & bond market (debt obligations).

Being one of the four major financial centers, the US boasts the largest number of securities transactions conducted on a daily basis. Entering US capital markets requires investors to be conversant in US securities laws; therefore, if you’re one of them, you should definitely have a look at what follows below. 

Buying & Selling Securities in the US

Those planning on buying or selling securities in America should keep in mind that securities traders there are typically registered as corporations, LLCs, limited partnerships, mutual funds, ETFs, trusts or REITs. Based inside or outside the United States, these organizations can issue the following types of securities:

  • ordinary & preference shares;
  • secured and unsecured debt obligations;
  • convertible debt securities;
  • bonds;
  • securitized debt obligations;
  • depositary receipts (representing shares of non-US companies);
  • options;
  • derivatives.

These securities may be sold to institutional & private investors.

Regulatory Framework

US capital markets are mainly regulated by federal government agencies, and more specifically, the SEC. The CFTC is another financial regulator, which is charged with proposing & enforcing important rules relating to the trade in securities in the US & capital markets.

Buying & selling securities in the United States requires  registration, with the only exception being made to companies & individuals that are explicitly exempted from registration. Any class of securities listed on US stock exchanges must be registered in accordance with the Securities Exchange Act, and the issuer of the corresponding class is required to submit annual reports to the SEC. Under the Exchange Act, unregistered equity securities, including those traded outside the US & held by a fairly large number of US residents, must be registered with relevant regulators. Under the Stock Exchange Act, conducting securities transactions in the US also requires registration & compliance with SEC rules.

Under the SEC Charter, individuals & companies conducting regulated transactions in the US must provide financial regulators with complete information about their activities. Detailed disclosure requirements applicable to such transactions are contained in the rules published by the SEC.

If you’re planning on obtaining a banking or insurance license in the US, you should keep in mind that your activities will be supervised & controlled by a number of regulators, both at the federal & state level. 


We have outlined some of the most important things non-US investors should keep in mind prior to investing in US capital markets. If you’re planning on conducting securities transactions in the United States of America, you will certainly have to pay attention to the ‘Dodd-Frank Act’. Aimed at strengthening investor protection through substantial market regulation, it somewhat contradicts SEC's previous efforts to reduce the regulatory burden on issuers. Apart from this piece of legislation, the US government is also contemplating other changes, including those aimed at improving consumer protection laws.

If you need legal advice on opening a company in the United States, IQ Decision UK will be happy to provide it to you. Our legal professionals are all well-versed in the latest regulatory changes & can provide you with an individual consultation on all registration-related matters