The USA adopted the Securities Law in 1933 when the depression was the most intense after the stock market crash of 1929. The Stock Exchange Law of 1934 created the Securities Exchange Commission (SEC) itself. SEC Congress founded it as the first independent federal regulator of the securities markets. The Commission appoints Joseph Kennedy as the first president to the SEC.
Both of these laws provide more reliable information and honest trading rules to increase confidence in capital markets. These laws are mainly aimed at companies offering securities, to tell the truth about their business most directly, and that traders (such as exchanges) treat investors fairly and honestly. As a result, Sec tries to encourage them to have a trustworthy market environment to gain or not lose public trust.
The U.S. Securities and Exchange Commission (SEC) is an independent federal agency that oversees and regulates the U.S. Exchanges and more massive securities industry. The Securities and Exchange Commission works to oversee company acquisitions and protect investors in the USA. SEC requires public companies to disclose their financial information; they must reveal their payment plans, such as fund expenses. Investment consultants should also disclose risk assessments, strategies, analysis methods, and discipline information. SEC aims to protect creditors and customers. All that we mentioned includes the mission of the SEC.
SEC tries to protect investors from bad players in the capital markets, prevent fraud, reveal illegal investment plans, and investigate other securities crimes. SEC implements disclosure requirements and financial applications for companies and investment advisors, and a public data store for many of these applications. Holds as, From investor complaints to investigations to prosecuting white-collar crimes, the SEC is busy working on a fair and level playing field in every securities dealing. As a result, the SEC's actions significantly reduced the USA's chances to experience another Great Depression.
The SEC's primary function is to oversee organizations and individuals in the securities markets, including the stock exchange, brokerage houses, dealers, and mutual funds. With established securities rules and regulations, the SEC encourages disclosure and sharing of market information, fair dealing, and fraud protection. It provides investors with access to records, periodic financial reports, and other forms of securities through an electronic data collection, analysis, and access database known as EDGAR.
Furthermore, the Securities and Exchange Commission advises the Minister on issues related to the Securities industry, sets the principles of industry guidance, takes measures to monitor the licensees' ability to pay, and protects customers' interests when a licensee must pay. To summarize, SEC reassures investors and U.S. exchanges with actions that ensure transparency in U.S. companies' financial affairs, thus enabling investors to obtain accurate and consistent information about corporate profitability.
The SEC is led by five commissioners, appointed by the chairman and one appointed as chairman. The term of office of each commissioner takes five years. SEC consists of five different parts:
1- Corporate Finance Department: It reviews corporate filing requirements. It ensures that investors are given complete and accurate information to make informed investment decisions. This allows investors to understand the health of a company.
2- Trade and Markets Department: The fair assists the Commission by carrying out its responsibility to maintain regular and efficient markets. It also provides oversight over the industry's self-regulatory bodies.
3- Investment Management Department: It regulates investment companies, federally registered investment management companies, including variable annual revenues.
4- Enforcement Department: Investigates particular violations of securities laws and regulations. The subpoena can use a formal investigation scheme to express and produce relevant documents to witnesses.
5- Economic and Risk Analysis Department: Provides economic and data analytics to other departments. It foresees how the proposed SEC rules will affect the markets and the economy. It reviews the overall risk in the markets.
As a result, the SEC is critical to the strong functioning of the U.S. economy. SEC increases transparency and confidence in the U.S. exchanges. This is a significant reason why the New York Stock Exchange is the world's most sophisticated and popular exchange.
Request a demo and learn how Sanction Scanner protects your firm from the Financial Crimes.Request Demo