In the United States, a security is defined as any note, capital stock, treasury stock, bond, debenture, or certificate of interest in profit-sharing agreements. This broad definition includes oil and gas royalties, collateral trust certificates, and even put options on foreign currency exchanges.
The Financial Conduct Authority restricts the term to equities, debentures, government securities, warrants, and pension schemes. Some jurisdictions exclude instruments that are merely close to fixed income from the official list.
Regulatory authorities restricted bearer forms heavily in the UK starting with the Exchange Control Act of 1947. The law of the 28th of July 2014 in Luxembourg mandates compulsory deposit of bearer shares.
A single financial instrument might be a security in one country but not another. These discrepancies create complex compliance challenges for multinational corporations issuing debt globally.
Courts developed broad definitions for investment contracts requiring registration under SEC rules. The Howey Test determines if a scheme constitutes an investment contract based on profit expectations from others' efforts.