SEC (Securities and Exchange Commission)
The SEC is the U.S. federal agency responsible for enforcing securities laws, regulating securities markets, and protecting investors from fraud and market manipulation.
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Exam Tip
SEC = federal government agency. FINRA = self-regulatory organization. Both regulate securities.
What is the SEC?
The Securities and Exchange Commission (SEC) is the primary federal regulatory agency for the securities industry. Created by the Securities Exchange Act of 1934, it protects investors and maintains fair, orderly markets.
SEC's Primary Functions
| Function | Description |
|---|---|
| Investor Protection | Combat fraud, ensure disclosure |
| Market Oversight | Regulate exchanges, broker-dealers |
| Corporate Disclosure | Require public company filings |
| Enforcement | Investigate and prosecute violations |
| Rulemaking | Create regulations under securities laws |
Key Securities Laws
| Law | Year | Purpose |
|---|---|---|
| Securities Act of 1933 | 1933 | New securities registration, prospectus |
| Securities Exchange Act of 1934 | 1934 | Created SEC, regulates secondary markets |
| Investment Company Act of 1940 | 1940 | Regulates mutual funds |
| Investment Advisers Act of 1940 | 1940 | Regulates investment advisers |
SEC Divisions
- Corporation Finance - Reviews company filings
- Trading and Markets - Oversees exchanges, broker-dealers
- Investment Management - Regulates investment companies
- Enforcement - Investigates violations
- Economic and Risk Analysis - Research and data
SEC Filings
| Filing | Description |
|---|---|
| 10-K | Annual report |
| 10-Q | Quarterly report |
| 8-K | Current report (material events) |
| Form 4 | Insider transactions |
| Prospectus | New securities offering |
EDGAR
Electronic Data Gathering, Analysis, and Retrieval (EDGAR) is the SEC's free online database of company filings.
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FINRA
FINRA (Financial Industry Regulatory Authority) is a self-regulatory organization that oversees broker-dealers and their registered representatives, administering qualification exams and enforcing securities rules.
Prospectus
A prospectus is a legal document filed with the SEC that provides details about an investment offering, including risks, fees, objectives, and management.
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