Issuer

An issuer is the entity that creates and sells securities to investors. Corporations issue common stock, preferred stock, and corporate bonds; the U.S. Treasury issues government debt; states and cities issue municipal bonds; and investment companies issue fund shares. In every case, the issuer is the party whose obligations or ownership interests the security represents.

Issuers sell securities to raise capital. When a company sells newly created shares in a public offering, the sale proceeds flow to the issuer — this is a primary market transaction, and it is often called an issuer transaction. Once those shares trade between investors on an exchange, the issuer receives nothing; those secondary market trades are nonissuer transactions. This issuer-versus-nonissuer distinction determines which registration rules and exemptions apply under securities law.

Issuers carry legal responsibilities. Under the Securities Act of 1933, an issuer selling securities publicly must register the offering with the SEC and deliver a prospectus disclosing material facts, unless the security or transaction qualifies for an exemption. State (blue sky) laws impose parallel registration requirements handled through methods like qualification, coordination, and filing.

The term issuer is foundational vocabulary on the securities licensing exams. The Series 63, Series 65, and Series 66 exams all draw on the Uniform Securities Act's definitions of issuers and securities, and regularly test whether a given transaction is an issuer or nonissuer transaction and what registration method applies.