The term 'Securities and Exchange Commission (SEC)' is included in the Corporate Finance edition of the Financial Dictionary. Get your copy on Amazon in Kindle, Paperback or Audio edition. Check for lowest price here...
The SEC is the acronym for the Securities and Exchange Commission. This Federal government agency actually governs the buying and selling of stock securities and other types of related investments. The SEC also works to safe guard investors against impropriety and fraud. They encourage the development of the market with the end goal of keeping America in the first place as the world’s leading economic giant.
The Securities and Exchange Commission came into existence in 1934. The stock market crash in 1929 prompted a tremendous regulatory response where the national government observed that it had to oversee and monitor investments within the U.S. The SEC is headquartered today in Washington D.C. Its staff is comprised of five commissioners who are appointed, as well as the personnel working in eleven different regional offices throughout the country. They work together to create, amend, and enforce the laws that regulate investments in the country.
The SEC has various critical missions. Among the most significant one is their role in ensuring that the markets are transparent. To do this, they significantly regulate securities trading within the U.S. Companies are required to turn in a variety of legal financial documents during the year so that investors may obtain a true picture of the total financial health of the firm in question.
The documents are kept on file in a database that is available to the public. Anyone who is interested is allowed to inspect them by logging on to the SEC’s website and working through their system of electronic documentation. The SEC has great powers that it exercises in enforcing the rules. It is able to mandate company audits if it has suspicions of illegal behavior. Those it finds in violation of its rules may be brought by the SEC to court.
In keeping with the SEC’s mandate to help safe guard investors, they monitor the trading of stocks and the individuals responsible for selling them. This means that exchanges, their dealers, and all stock brokers are required to work through the Securities and Exchange Commission. They can be subjected to inspection from time to time to be certain that they are properly taking care of their customers. Consumers have the right to report practices that are unfair to the SEC directly. If you are an investor, you ought to avail yourself of the SEC’s wide range of documents on the various publicly traded corporations that they keep in their database on their website.
The SEC additionally governs companies that are interested in undergoing Initial Public Offerings in order to become public companies. Such interested firms have to file a significant quantity of documents with them first. To help them accomplish this, the SEC engages a big staff. Their document database includes regulations and directions for filing such documents. Consultation help is available if companies run into difficulties.
The SEC also promotes education. If you are an investor who wants to learn more about safe investing, then simply go to their website. They have workshops and publications on the site to help all investors. This is in addition to all of the companies’ documents kept on file there.