Securities and Exchange Commission
/What is the Securities and Exchange Commission?
The Securities and Exchange Commission (SEC) is a United States government agency that regulates the securities markets. The intent behind the SEC is to protect the investing public by promoting the full disclosure of financial information and by investigating cases of financial fraud. The SEC regulates all stock exchanges operating within the United States. The SEC also specifies the reporting requirements of all publicly-held entities within the country. It mandates that all public entities submit quarterly and annual financial reports, which are then made available to the public on its website.
The SEC was authorized by Congress in 1934.
Functions of the Securities and Exchange Commission
The main functions of the SEC are as follows:
Protects investors. The SEC ensures that investors have access to accurate and transparent financial information. This prevents fraud, insider trading, and deceptive practices.
Enforces securities laws. The SEC investigates violations of securities laws, taking legal action against fraudulent activities, market manipulation, and unethical practices.
Regulates securities markets. The SEC oversees the operations of stock exchanges (e.g., NYSE, NASDAQ) and brokerage firms.
Oversees financial disclosures. The SEC mandates that publicly traded companies file reports like the 10-K (annual report) and 10-Q (quarterly report).
Regulates public offerings. The SEC oversees Initial Public Offerings (IPOs) and other security issuances, ensuring that companies provide necessary disclosures before going public.
Regulates mutual funds and investment advisors. The SEC monitors fund managers and financial advisors to ensure their compliance with regulations.
Oversees corporate governance. The SEC enforces rules related to executive compensation, shareholder rights, and board responsibilities.