What is the Securities and Exchange Commission (SEC)?

Securities and Exchange Commission. The primary federal regulatory agency for the securities industry, whose responsibility is to promote full disclosure and to protect investors against fraudulent and manipulative practices in the securities markets. The securities and Exchange Commission enforces, among other acts, the Securities Act of1933, the Securities Exchange Act of1934, the Trust...

Securities and Exchange or also known as SEC, were created by the Congress to have security over the markets and to protect investors.

This was done so when investors bought more than5% of a certain company they would inform the Congress, as it would create takeover threats.

The Securities and Exchange Commission (SEC) is a government agency that oversees securities transactions, activities of financial professionals and mutual fund trading to prevent fraud and intentional deception.

It is the responsibility of the SEC to ensure that investors can confidently and with good faith invest their money without fear of corruption, either from the brokers or exchanges that facilitate trading or from the companies that issue the securities. Nevertheless, even with stringent laws in place, we've still seen examples of corporate malfeasance (at companies like Enron), as well as market timing/late trading scandals within the mutual fund industry. These corporate misdeeds have wiped out millions of dollars and have caused some investors to lose faith in the system.

Fortunately, though, every year the vigilant efforts of the SEC result in civil actions against400 to500 individuals and corporations that attempt to skirt the law. By forcing strict compliance with regulations and swiftly dealing with those who fail to follow them, the SEC strives to maintain integrity and fairness in the markets.

SEC a US organisation that gives rules and controles Financial Markets.

The mission of the U.S. Securities and Exchange Commission is to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation. As more and more first-time investors turn to the markets to help secure their futures, pay for homes, and send children to college, our investor protection mission is more compelling than ever. As our nation's securities exchanges mature into global for-profit competitors, there is even greater need for sound market regulation. And the common interest of all Americans in a growing economy that produces jobs, improves our standard of living, and protects the value of our savings means that all of the SEC's actions must be taken with an eye toward promoting the capital formation that is necessary to sustain economic growth. The world of investing is fascinating and complex, and it can be very fruitful. But unlike the banking world, where deposits are guaranteed by the federal government, stocks, bonds and other securities can lose value. There are no guarantees. That's why investing is not a spectator sport. By far the best way for investors to protect the money they put into the securities markets is to do research and ask questions. 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 result of this information flow is a far more active, efficient, and transparent capital market that facilitates the capital formation so important to our nation's economy. To insure that this objective is always being met, the SEC continually works with all major market participants, including especially the investors in our securities markets, to listen to their concerns and to learn from their experience. The SEC oversees the key participants in the 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. Crucial to the SEC's effectiveness in each of these areas is its enforcement authority. Each year the SEC brings hundreds of civil enforcement actions against individuals and companies for violation of the securities laws. Typical infractions include insider trading, accounting fraud, and providing false or misleading information about securities and the companies that issue them. One of the major sources of information on which the SEC relies to bring enforcement action is investors themselves — another reason that educated and careful investors are so critical to the functioning of efficient markets. To help support investor education, the SEC offers the public a wealth of educational information on this Internet website, which also includes the EDGAR database of disclosure documents that public companies are required to file with the Commission. Though it is the primary overseer and regulator of the U.S. securities markets, the SEC works closely with many other institutions, including Congress, other federal departments and agencies, the self-regulatory organizations (e.g. the stock exchanges), state securities regulators, and various private sector organizations. In particular, the Chairman of the SEC, together with the Chairman of the Federal Reserve, the Secretary of the Treasury, and the Chairman of the Commodity Futures Trading Commission, serves as a member of the President's Working Group on Financial Markets. This article is an overview of the SEC's history, responsibilities, activities, organization, and operation. More detailed information about many of these topics is available throughout this website. Creation of the SEC The SEC's foundation was laid in an era that was ripe for reform. Before the Great Crash of1929, there was little support for federal regulation of the securities markets. This was particularly true during the post-World War I surge of securities activity. Proposals that the federal government require financial disclosure and prevent the fraudulent sale of stock were never seriously pursued. Tempted by promises of "rags to riches" transformations and easy credit, most investors gave little thought to the systemic risk that arose from widespread abuse of margin financing and unreliable information about the securities in which they were investing. During the1920s, approximately20 million large and small shareholders took advantage of post-war prosperity and set out to make their fortunes in the stock market. It is estimated that of the $50 billion in new securities offered during this period, half became worthless. Pres. Franklin D. Roosevelt President Franklin D. Roosevelt Joseph Kennedy When the stock market crashed in October1929, public confidence in the markets plummeted. Investors large and small, as well as the banks who had loaned to them, lost great sums of money in the ensuing Great Depression. There was a consensus that for the economy to recover, the public's faith in the capital markets needed to be restored. Congress held hearings to identify the problems and search for solutions. Based on the findings in these hearings, Congress — during the peak year of the Depression — passed the Securities Act of1933. This law, together with the Securities Exchange Act of1934, which created the SEC, was designed to restore investor confidence in our capital markets by providing investors and the markets with more reliable information and clear rules of honest dealing. The main purposes of these laws can be reduced to two common-sense notions: Companies publicly offering securities for investment dollars must tell the public the truth about their businesses, the securities they are selling, and the risks involved in investing. People who sell and trade securities – brokers, dealers, and exchanges – must treat investors fairly and honestly, putting investors' interests first. Monitoring the securities industry requires a highly coordinated effort. Congress established the Securities and Exchange Commission in1934 to enforce the newly-passed securities laws, to promote stability in the markets and, most importantly, to protect investors. President Franklin Delano Roosevelt appointed Joseph P. Kennedy, President John F. Kennedy's father, to serve as the first Chairman of the SEC. Organization of the SEC The SEC consists of five presidentially-appointed Commissioners, with staggered five-year terms (see SEC Organization Chart; text version also available). One of them is designated by the President as Chairman of the Commission — the agency's chief executive. By law, no more than three of the Commissioners may belong to the same political party, ensuring non-partisanship. The agency's functional responsibilities are organized into five Divisions and23 Offices, each of which is headquartered in Washington, DC. The Commission's approximately3,500 staff are located in Washington and in11 Regional Offices throughout the country. It is the responsibility of the Commission to: interpret and enforce federal securities laws; issue new rules and amend existing rules; oversee the inspection of securities firms, brokers, investment advisers, and ratings agencies; oversee private regulatory organizations in the securities, accounting, and auditing fields; and coordinate U.S. securities regulation with federal, state, and foreign authorities. The Commission convenes regularly at meetings that are open to the public and the news media unless the discussion pertains to confidential subjects, such as whether to begin an enforcement investigation. Divisions Division of Corporation Finance The Division of Corporation Finance assists the Commission in executing its responsibility to oversee corporate disclosure of important information to the investing public. Corporations are required to comply with regulations pertaining to disclosure that must be made when stock is initially sold and then on a continuing and periodic basis. The Division's staff routinely reviews the disclosure documents filed by companies. The staff also provides companies with assistance interpreting the Commission's rules and recommends to the Commission new rules for adoption. The Division of Corporation Finance reviews documents that publicly-held companies are required to file with the Commission. The documents include: registration statements for newly-offered securities; annual and quarterly filings (Forms10-K and10-Q); proxy materials sent to shareholders before an annual meeting; annual reports to shareholders; documents concerning tender offers (a tender offer is an offer to buy a large number of shares of a corporation, usually at a premium above the current market price); and filings related to mergers and acquisitions.

This is a governing body, managing corporate sector of Pakistan.

A government commission created by Congress to regulate the securities markets and protect investors. In addition to regulation and protection, it also monitors the corporate takeovers in the U.S. The SEC is composed of five commissioners appointed by the U.S. President and approved by the Senate. The statutes administered by the SEC are designed to promote full public disclosure and to protect the investing public against fraudulent and manipulative practices in the securities markets. Generally, most issues of securities offered in interstate commerce, through the mail or on the internet must be registered with the SEC.

along with the experts' answer;

The SEC requires public companies to divulge financial information to the public so that investors are protected and that the markets are regulated

I agree with Mr. Vinod answer.

 

The Securities and Exchange Commission or the SEC was created for regulation and protection of investors. The intention is to promote full disclosure within the securities market and to protect public investors from fraudulent action.

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