Securities and Exchange Commission (SEC)

What Is the Securities and Exchange Commission (SEC)?

The Securities and Exchange Commission (SEC) is an independent federal agency that regulates the securities markets in the United States. The SEC was created by Congress in 1934 to protect investors from fraudulent practices, promote fairness in the market, and ensure transparency of information for public companies. The SEC has a wide range of responsibilities including enforcing laws related to insider trading, regulating stock exchanges, reviewing corporate disclosures such as financial statements and prospectuses, overseeing mutual funds and other investment products, monitoring broker-dealers’ activities with customers, and providing investor education materials.

The SEC works closely with state securities regulators to enforce compliance with both federal and state regulations. It also works with self-regulatory organizations like FINRA (Financial Industry Regulatory Authority), which oversees brokers who sell stocks or bonds on behalf of their clients. In addition to its regulatory role, the SEC provides resources for investors through its website where they can find educational materials about investing topics such as understanding risk tolerance levels or researching potential investments before buying them. By helping investors make informed decisions when it comes to their money, the SEC helps maintain confidence in our nation’s capital markets so that businesses have access to capital needed for growth while protecting individual investors from fraudsters looking to take advantage of unsuspecting victims.

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