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Why Is There Need for Regulation of the Issuing of Stocks

question 11

Essay

Why is there need for regulation of the issuing of stocks and bonds? What market imperfection is addressed in this regulation?


Definitions:

Assignment

The transfer of rights, property, or obligations from one party to another.

Delegation

The act of assigning responsibility or authority from one person to another to carry out specific activities.

Incidental Beneficiary

A third party who benefits from a contract between two other parties, albeit without any intention from the contracting parties to benefit the third party.

Contract

A legally enforceable agreement between two or more parties with mutual obligations.

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