Non-Covered Security

A non-covered security is a security that is not listed on a national securities exchange or on the National Association of Securities Dealers Automated Quotations (NASDAQ) system. Non-covered securities include stocks, bonds, and other investment products that are not traded on a major exchange.

Non-covered securities are often considered to be riskier than covered securities because they are not as liquid and there is less information available about them. This makes them more difficult to value and trade.

There are a number of reasons why a security may not be listed on a major exchange. For example, a company may be too small or too new to meet the listing requirements of an exchange. Or, a company may have chosen not to list its securities on an exchange.

Non-covered securities are often sold through private placements, which are transactions that are not made through a public exchange. This means that there is less information available about these securities and they are more difficult to trade.

Because of the risks associated with non-covered securities, investors should be careful when considering investing in these products. They should do their own research and consult with a financial advisor before making any investment decisions.

Here are some additional things to keep in mind about non-covered securities:

• They are not subject to the same regulations as covered securities. This means that there is less oversight of these products and investors may have fewer protections.
• They may be more volatile than covered securities. This is because there is less liquidity in the market for non-covered securities and there is less information available about them.
• They may be harder to sell. This is because there is less demand for non-covered securities and there are fewer buyers available.

If you are considering investing in non-covered securities, it is important to understand the risks involved. You should do your own research and consult with a financial advisor before making any investment decisions.