An issuer is a legal entity that issues financial instruments. Depending on the jurisdiction the issuer is domiciled in, the work of an issuer includes to develop, register and sell securities for the purpose of financing its operations. The most common types of securities issued are equities (common and preferred stocks) and debt (bonds, notes, debentures and bills).
The word issuer is so common in finance that it is easy to overlook the exact meaning of the word. The word meaning differs depending on the context. Different laws do not agree in their definitions. This applies not only between the jurisdictions of different states, but even within one jurisdiction.
Various rating agencies offer issuer ratings. Because of the various meanings of the word “issuer” these ratings have to be asked who exactly is meant. On the other hand, it must also be taken into account which exact characteristics of the issuer are classified by the rating. A rating can classify creditworthiness, but also, for example, the issuer’s compliance with ethical, ecological and social criteria.
In the Listing Rules of the United Kingdom of Great Britain and Northern Ireland, for example, any company, legal person or undertaking, any class of whose securities has been admitted to listing or is the subject of an application for admission to listing. In the Disclosure Guidance and Transparency Rules an issuer is a legal entity governed by private or public law which issues or proposes to issue financial instruments; a person whose securities are admitted to trading on a regulated market; and either a person whose shares are admitted to trading on a regulated market or a public company and any other body corporate incorporated in and having a principal place of business in the UK, whose shares are admitted to trading on a prescribed market (not being a regulated market). In the Prospectus Regulation Rules an issuer is a legal person who issues or proposes to issue the transferable securities in question. The examples show that the term “issuer” has different meanings depending on the context in which it is used.
In the United States of America, the term “issuer” means every person who issues or proposes to issue any security; except that with respect to certificates of deposit, voting-trust certificates, or collateral-trust certificates, or with respect to certificates of interest or shares in an unincorporated investment trust not having a board of directors (or persons performing similar functions) or of the fixed, restricted management, or unit type, the term “issuer” means the person or persons performing the acts and assuming the duties of depositor or manager pursuant to the provisions of the trust or other agreement or instrument under which such securities are issued; except that in the case of an unincorporated association which provides by its articles for limited liability of any or all of its members, or in the case of a trust, committee, or other legal entity, the trustees or members thereof shall not be individually liable as issuers of any security issued by the association, trust, committee, or other legal entity; except that with respect to equipment-trust certificates or like securities, the term “issuer” means the person by whom the equipment or property is or is to be used; and except that with respect to fractional undivided interests in oil, gas, or other mineral rights, the term “issuer” means the owner of any such right or of any interest in such right (whether whole or fractional) who creates fractional interests therein for the purpose of public offering.
In conclusion, issuers may be governments, corporations, investment trusts or other legal entities. In general, issuers are legally responsible for the obligations of the issue and for reporting financial conditions, material developments and any other operational activities as required by the regulations of their jurisdictions.