The Securities and Exchange Commission (SEC) is the primary federal agency responsible for regulating the securities industry in the United States. It is tasked with protecting investors, ensuring the integrity of the market, and facilitating capital formation.

Key Functions:

• Regulation:
  • Setting and enforcing securities laws and regulations.
  • Regulating the activities of broker-dealers, investment banks, and other financial institutions.
  • Developing and implementing rules for securities exchanges and other market participants.
• Protection of Investors:
  • Ensuring fair and efficient markets.
  • Preventing fraud and other abuses.
  • Providing investors with access to accurate and timely information.
• Market Integrity:
  • Maintaining the integrity and stability of the market.
  • Investigating and prosecuting violations of securities laws.
  • Ensuring the accuracy and reliability of financial information.
• Facilitating Capital Formation:
  • Promoting capital formation and investment.
  • Facilitating the flow of capital to businesses.
  • Providing mechanisms for investors to participate in the market.

Major Divisions:

• Division of Enforcement: Enforces securities laws and regulations against violators.
• Division of Investment Management: Regulates investment companies and other regulated investment entities.
• Division of Trading and Markets: Regulates securities exchanges and other market participants.
• Division of Corporation Finance: Provides accounting and reporting guidance to corporations.
• Office of Investor Education: Educates investors about securities laws and regulations.

Key Regulations:

• Securities Exchange Act of 1934
• Investment Company Act of 1940
• Dodd-Frank Wall Street Reform and Consumer Protection Act

Notable Actions:

• Instituting regulations on initial public offerings (IPOs) and other securities offerings.
• Cracking down on securities fraud and market manipulation.
• Implementing regulations on electronic trading and cybersecurity.
• Providing guidance on accounting standards and financial reporting.

The SEC is a critical agency in the U.S. financial system, playing a vital role in maintaining market integrity, protecting investors, and facilitating capital formation.