§ 821 Security Definition Exceptions

• •“Security” covers most financial instruments that people call securities.
• •Commercial paper used in normal business is NOT a security under this law.
• •Promissory notes that aren’t sold to the public or to an underwriter are also NOT securities.
• •Mortgage participation certificates made under a specific chapter are excluded.
• •Insurance policies issued by an insurer are not considered securities.

A company sells a short‑term loan (commercial paper) to another company as part of its normal business operations.

Even though the loan looks like a security, the law says it isn’t a security because commercial paper used in ordinary business is excluded.