Who is the SEC?
The SEC has a three-part mission. Investor protection; Maintaining fair, orderly, and efficient markets; Creating favorable conditions for capital formation.
To accomplish its mission, the SEC enforces statutory requirements requiring public companies and other regulated entities to file quarterly, annual reports, and other periodic disclosures. In addition to annual financial reports, company management must provide an explanatory account called the Management Discussion and Analysis (MD&A) that summarizes the company's performance in previous years and explains the company's performance in the current period. The MD&A typically covers the coming year, outlining future goals and prospects for new projects.
Quarterly and semi-annual reports from public companies are important for investors to make informed decisions when investing in the capital markets. Unlike banks, investments in the capital markets are not guaranteed by the federal government. You must weigh the possibility of making large profits against the possibility of incurring large losses. Mandatory disclosure of financial and other information about issuers and securities would provide individuals and large institutions with essentially the same investment information, thereby reducing insider trading and fraud and increasing public oversight.
To provide a level playing field for all investors, the SEC created an online database called EDGAR (Electronic Data Gathering, Analysis and Retrieval System) through which institutional investors can access information such as reports filed in the same online system that maintains it. We also accept investor suggestions and complaints and publish publications on related topics to help the SEC pursue potential securities law violators. This is about investing in public education. The SEC maintains a strict policy of not commenting on the existence or status of ongoing investigations.
The SEC's authority was established by the Securities Act of 1933 and the Securities Exchange Act of 1934. Both laws were considered part of Franklin Roosevelt's New Deal program.
After the Pecora Committee held hearings on securities market abuse and fraud, Congress passed the Securities Act of 1933 (15 U.S.C. § 77a). The law regulates securities business statewide, but essentially requires issuers to register prior income distributions. Enable investors to obtain basic financial information and make informed decisions. [11] During the first year of the law's implementation, the Federal Trade Commission exercised enforcement authority.
The Securities Exchange Act of 1934 (15 U.S.C. § 78d) regulates the secondary market for securities. The 1934 law generally governs secondary transactions between persons and companies that are not related to the original issuer of a security. The SEC's jurisdiction includes securities exchanges with physical trading floors (such as the New York Stock Exchange), self-regulatory organizations, municipal securities exchanges, NASDAQ, alternative broker-dealers, and other entities that engage in trading for the account of others. Section 4 of the 1934 Act transferred the FTC's enforcement authority under the 1933 Act to the newly created Securities and Exchange Commission and charged the new Commission with enforcing both laws.
Kennedy's team outlined four challenges for the new Commission: (1) Restore investor confidence in a stock market that had effectively collapsed. (2) Restore the health of the securities markets by prosecuting and eliminating fraudulent and unfair practices against investors. (3) Eliminate multimillion-dollar insider trading by senior executives of large corporations. (4) Establish a comprehensive, universal registration system for securities sold in the United States, with clear deadlines, rules, and guidelines. The SEC succeeded. Kennedy was convinced that American business would no longer be deceived, cheated, and taken advantage of by Wall Street. He became a cheerleader for ordinary investors to return to the markets and help the economy grow again.
The Division of Economic and Risk Analysis (DERA) was established in September 2009 to integrate financial economics and rigorous data analysis into the core mission of the SEC. The division participates in the full range of SEC activities, including policy development, rulemaking, enforcement, and investigations. Serving as the agency's "advisory arm," DERA uses its knowledge of a variety of disciplines, quantitative and non-quantitative methods, and institutional and market practices to help the Commission see complex issues from new perspectives. DERA also supports the Commission in identifying, analyzing, and responding to v.
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