---
name: us-securities-law-sec
description: Use this skill when a request involves US federal securities-law issue-spotting — registration vs exemption, disclosure and periodic-reporting obligations, or broker-dealer / investment-adviser conduct rules. It produces an organised, well-cited issue map for licensed securities counsel to review — never a legal conclusion, a filing position, or an offering decision.
---

# US Securities Regulation (SEC)

> **What this is** — a repeatable, AI-assisted working method for doing the structured legwork on a US federal securities-law question, often beyond one's own formal training, and producing a rigorous first-pass issue map quickly, with qualified securities counsel kept in the loop.
> **What this is NOT** — **not legal advice, and not a substitute for a licensed securities attorney.** **This does not decide whether an offering is registered or exempt, whether a disclosure is adequate, or whether any conduct complies — those are legal conclusions only counsel can reach.** Securities law is fact-specific, judicially interpreted, and changes with SEC rulemaking and enforcement; every finding is a draft requiring professional review before it is relied on, filed, or acted on. No attorney-client relationship is created.
> **Anti-fraud notice** — **Rule 10b-5 (17 CFR 240.10b-5)** and **Section 17(a)** anti-fraud liability turn on facts and intent that no first-pass map can resolve. Nothing here evaluates or clears any statement, omission, or trade; anything touching potential fraud, insider information, or market manipulation is escalated to counsel immediately, not analysed here.

## When to use this
- A startup or issuer is weighing a capital raise and needs the registration-vs-exemption landscape laid out before the securities-counsel meeting.
- A product or finance team asks "does this trigger SEC reporting?" and wants the periodic-disclosure obligations issue-spotted.
- A fintech is designing a broker-dealer or investment-adviser surface and needs the relevant conduct rules (Reg BI, fiduciary duty) mapped as design/compliance inputs.
- A due-diligence, board, or RFP packet asks for a securities-law issue summary or a disclosure checklist.
- The team needs raw securities-law facts assembled and cited so counsel spends time deciding, not gathering.

## Operating principle
AI and a repeatable structure map the issues, assemble the authorities, and organise the open questions; licensed securities counsel decides every conclusion. The value is a faster, better-organised, well-cited starting point for the attorney — never the final word, never a registration/exemption determination, and never a disclosure-adequacy or compliance opinion.

## Capability 1 — Registration vs exemption mapping
**Goal.** Lay out whether an offering would fall under Securities Act registration or a likely exemption so counsel can choose — not decide the path.
**Inputs.** Instrument description, investor profile (accredited / retail / institutional), amounts, jurisdictions, general-solicitation plans, resale expectations.
**Method.**
1. Frame the default rule: an offer or sale of a **security** must be registered under the **Securities Act of 1933 (15 U.S.C. §77a et seq.)** unless an exemption applies.
2. Where "is this a security?" is itself the question, flag the **Howey** investment-contract test as a legal issue for counsel — do not conclude it.
3. Lay out the common exemption **options** as candidates: **Regulation D** (Rules 504/506(b)/506(c)), **Regulation S** (offshore), **Regulation A/A+**, **Rule 144 / 144A** (resales), intrastate — with the general conditions each imposes (investor limits, accreditation, general-solicitation rules, resale restrictions, Form D notice).
4. Note **integration** and **general-solicitation** issues as risks to resolve, not settled facts.
5. Assemble a side-by-side matrix: path, general conditions, open questions, why counsel must confirm.
**Output.** A registration-vs-exemption matrix, each cell sourced or flagged, framed as options for counsel.
**Quality bar (what the professional receives).** Exemption options and their general conditions are laid out; "is it a security" and "does the exemption apply" appear as legal issues, not conclusions; no offering path is recommended or cleared.

## Capability 2 — Disclosure & periodic-reporting issue-spotting
**Goal.** Issue-spot the disclosure and reporting obligations that *may* apply and the items each generally requires — never an adequacy judgment.
**Inputs.** Entity status (private / pre-IPO / reporting company), triggering events, prior filings if any, the disclosure document under review.
**Method.**
1. Map the periodic-reporting regime under the **Securities Exchange Act of 1934 (15 U.S.C. §78m)**: **Form 10-K** (annual), **Form 10-Q** (quarterly), **Form 8-K** (current) — as obligations to confirm against reporting status.
2. Note the content frameworks **Regulation S-K** (non-financial disclosure) and **Regulation S-X** (financial-statement form and content) as the standards counsel and auditors apply.
3. Surface **Sarbanes-Oxley** certification/ICFR concepts and **Regulation FD** (fair disclosure) as issue areas, not compliance conclusions.
4. For a disclosure draft, build an **item-coverage checklist** (is each required item addressed?) — coverage, not adequacy; adequacy and materiality are legal judgments for counsel.
5. Flag every materiality call, forward-looking statement, and risk-factor as an item for counsel and auditors.
**Output.** A reporting-obligations register and a disclosure item-coverage checklist, each item sourced or flagged.
**Quality bar (what the professional receives).** Obligations are mapped to the relevant form and rule; item coverage is checked; **no adequacy, materiality, or completeness conclusion is stated** — counsel and auditors decide.

## Capability 3 — Conduct-rule mapping (broker-dealer / adviser)
**Goal.** Map the conduct rules relevant to a broker-dealer or investment-adviser surface so the design/compliance team can build to them — not certify compliance.
**Inputs.** Business model (broker-dealer, RIA, dual-hat), retail vs institutional customers, the recommendation/advice flow, disclosures presented.
**Method.**
1. For broker-dealers dealing with retail, map **Regulation Best Interest (Reg BI, 17 CFR 240.15l-1)** and its four obligations (disclosure, care, conflict-of-interest, compliance) plus **Form CRS** as design/compliance inputs.
2. For investment advisers, map the **Investment Advisers Act of 1940** fiduciary duty (duty of care + duty of loyalty) as the standard the surface must support.
3. Note **suitability**-adjacent concepts (FINRA Rule 2111 for member firms) where relevant, framed as the member-firm standard.
4. Translate each obligation into **surfaceable requirements** (what must be disclosed, when, how conflicts are surfaced, what records are kept) so the design honours the rule at input — echoing the regulated-design discipline in this portfolio.
5. Flag anything that reads as advice, a recommendation, or a guarantee for compliance and legal review.
**Output.** A conduct-rule-to-requirement map: rule, obligation, surface requirement, open question for compliance/legal.
**Quality bar (what the professional receives).** Each obligation is mapped to a concrete surface requirement and its rule; nothing is certified compliant; every recommendation/advice boundary is flagged for the licensed reviewer.

## Worked example (illustrative)
*Illustrative only — plainly hypothetical facts.* A fintech wants to let accredited users invest in a tokenised revenue-share instrument, marketed on its website. The first-pass map would: (1) flag **"is the token a security?"** under **Howey** as the threshold legal issue for counsel; (2) if it is, lay out **Reg D 506(c)** as an *option* (accredited-only, verification required, general solicitation permitted) versus **Reg S** or **Reg A+**, with Form D notice noted — as choices, not a recommendation; (3) map the **Reg BI / adviser** questions if the platform recommends the instrument; (4) list the anti-fraud and marketing-rule risks and route them, plus the securities determination, to counsel. Every item is marked draft. The securities attorney decides.

## Guardrails & escalation
- **Escalate immediately to licensed securities counsel:** any actual offering, marketing, or sale; anything touching **Rule 10b-5**, insider trading, or manipulation; any "is it a security" determination; any registration/exemption decision; any disclosure that will be filed or published; any enforcement or examination context.
- **Never** conclude that an instrument is or isn't a security, that an exemption applies, that a disclosure is adequate or material, or that conduct complies; never draft a filing position; never present any of this as legal advice.
- **Flag uncertainty explicitly:** every missing fact, judicially-interpreted standard, and unresolved issue goes in an "open questions for securities counsel" section rather than being silently resolved. SEC rules change through rulemaking and enforcement; note that every citation must be re-verified against current authority.

## References & sources
- **Securities Act of 1933** (15 U.S.C. §77a et seq.) — registration and exemptions; **Regulation D** (Rules 504, 506(b), 506(c)), **Regulation S**, **Regulation A/A+**, **Rule 144 / 144A**, Form D.
- **Securities Exchange Act of 1934** (15 U.S.C. §78) — periodic reporting (**Forms 10-K / 10-Q / 8-K**), **Rule 10b-5** (17 CFR 240.10b-5), Section 17(a) anti-fraud.
- **Regulation S-K** and **Regulation S-X** — disclosure and financial-statement content.
- **Regulation Best Interest** (17 CFR 240.15l-1) and **Form CRS**; **Investment Advisers Act of 1940** fiduciary duty; **FINRA Rule 2111** (suitability) for member firms.
- **Sarbanes-Oxley Act of 2002**, **Dodd-Frank Act**, **Regulation FD** — issue-area concepts.
- **SEC v. W.J. Howey Co.**, 328 U.S. 293 (1946) — investment-contract test. Securities law is fact-specific and evolving; verify every provision against current SEC and judicial authority before reliance.

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*Part of Ed Chen's AI skill set — how one designer absorbs unfamiliar, regulated, C-level work quickly by pairing AI with rigor and professional review. https://edwson.com*