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Securities and Exchange Commission (SEC)

The mission of the Securities and Exchange Commission (SEC) is to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation.  Unlike the banking world, where deposits are almost always guaranteed by the federal government, stocks, bonds and other securities can lose value. There are no guarantees. The laws and rules that govern the securities industry in the United States derive from a simple and straightforward concept: all investors, whether large institutions or private individuals, should have access to certain basic facts about an investment prior to buying it, and so long as they hold it. To achieve this, the SEC requires public companies to disclose meaningful financial and other information to the public. This provides a common pool of knowledge for all investors to use to judge for themselves whether to buy, sell, or hold a particular security. Only through the steady flow of timely, comprehensive, and accurate information can people make sound investment decisions.

The SEC oversees the key participants in this securities world, including securities exchanges, securities brokers and dealers, investment advisors, and mutual funds.  Here the SEC is concerned primarily with promoting the disclosure of important market-related information, maintaining fair dealing, and protecting against fraud.

In the aftermath of the Stock Market Crash of 1929, Congress passed the Securities Act of 1933 and the Securities Exchange Act of 1934, which established the SEC as a regulatory agency of the federal government.  The SEC consists of 5 commissioners appointed by the President, 4 Divisions and 18 Offices. The SEC has 11 regional offices and over 3,000 employees nationwide.  The President also designates one of the commissioners as Chairman.

At these meetings the Commissioners interpret federal securities laws, amend existing rules, propose new rules to address changing market conditions, and/or enforce rules and laws. These meetings are open to the public and the news media unless the discussion pertains to confidential subjects, such as whether to begin an enforcement investigation.

The principal laws that govern the securities industry and which are administered by the SEC are the Securities Act of 1933, the Securities Exchange Act of 1934, the Trust Indenture Act of 1939, the Investment Company Act of 1940, the Investment Advisors Act of 1940, and the Sarbanes-Oxley Act of 2002.

For more information, see

Last modified at 7/27/2010 11:14 AM  by SHAHEEN, ROSEMARIE