The Securities and Exchange Commission (SEC) is an independent agency of the U.S. government which protects investors, maintains fair and orderly markets, and promotes capital formation. The SEC was established in 1934 in response to the Great Depression to regulate the securities markets and protect investors. It is responsible for enforcing the federal securities laws and regulations that govern the stock, commodity and derivatives markets. The SEC also oversees the public offerings of stocks, bonds, and other securities.
Key Responsibilities of the SEC
The primary mission of the SEC is to protect investors, including individuals and institutions, against unfair or deceptive practices used by securities brokers or dealers, as well as to ensure that investors have accurate information about securities investments. To this end, the SEC has a number of duties, including:
- Administering and enforcing the federal securities laws.
- Determining whether securities offerings are registered correctly, relevant documents are filed with the SEC and the offering is properly disseminated to the public.
- Examining and investigating securities firms, broker-dealers, market professionals, and other entities.
- Providing investor educational materials.
- Performing research on securities markets.
- Assessing the effectiveness of the securities industry’s self-regulatory organizations.
Other Areas Where the SEC Has a Presence
The SEC does not just restrict itself to stocks and bonds. In addition, it provides oversight and guidance for the mutual funds, cryptocurrency, commodities, real estate, and other complex investment instruments. It also regulates proxy processes, insider trading, accounting rules, mergers and acquisitions, bankruptcies and corporate governance.
The SEC is a powerful and important regulator of financial markets in the United States. By providing oversight and enforcement of the laws that protect investors, the SEC works to ensure that the financial markets provide accurate and reliable information to investors.