SEC



**Securities and Exchange Commission**

 The SEC was created by section 4 of the [|Securities Exchange Act of 1934] (now codified as [|15 U.S.C.] [|§ 78d] and commonly referred to as the 1934 Act).
 * About them: **

 The mission of the **U.S. Securities and Exchange Commission** is to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation. The SEC maintains balance and protects the United States investments and the investments of those in the country.
 * What they do: **

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



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=__Creation of the SEC__=

 When the stock market crashed in October 1929, public confidence in the markets dropped terribly. 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.

 Because of the findings in these hearings, Congress, during the peak year of the Depression, passed the Securities Act of 1933. This law, together with the Securities Exchange Act of 1934, created the SEC, for the purpose 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.

Congress established the Securities and Exchange Commission in 1934 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 SEC__= It is the responsibility of the Commission to:
 * interpret 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
 * coordinate U.S. securities regulation with federal, state, and foreign authorities

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.

**Division of Trading and Markets**
The [|Division of Trading and Markets] assists the Commission in executing its responsibility for maintaining fair, orderly, and efficient markets. The staff of the Division provide day-to-day oversight of the major securities market participants: the securities exchanges; securities firms; self-regulatory organizations (SROs) including the Financial Industry Regulatory Authority (FInRA), the Municipal Securities Rulemaking Board (MSRB), clearing agencies that help facilitate trade settlement; transfer agents (parties that maintain records of securities owners); securities information processors; and credit rating agencies.

**Division of Investment Management**
The [|Division of Investment Management] assists the Commission in executing its responsibility for investor protection and for promoting capital formation through oversight and regulation of America's $26 trillion investment management industry. This important part of the U.S. capital markets includes mutual funds and the professional fund managers who advise them; analysts who research individual assets and asset classes; and investment advisers to individual customers. Because of the high concentration of individual investors in the mutual funds, exchange-traded funds, and other investments that fall within the Division's purview, the Division of Investment Management is focused on ensuring that disclosures about these investments are useful to retail customers, and that the regulatory costs which consumers must bear are not excessive.

**Division of Enforcement**
First and foremost, the SEC is a law enforcement agency. The [|Division of Enforcement] assists the Commission in executing its law enforcement function by recommending the commencement of investigations of securities law violations, by recommending that the Commission bring civil actions in federal court or before an administrative law judge, and by prosecuting these cases on behalf of the Commission. As an adjunct to the SEC's civil enforcement authority, the Division works closely with law enforcement agencies in the U.S. and around the world to bring criminal cases when appropriate.

**Division of Risk, Strategy, and Financial Innovation**
The Division of Risk, Strategy, and Financial Innovation was established in September 2009 to help further identify developing risks and trends in the financial markets.

This new Division is providing the Commission with sophisticated analysis that integrates economic, financial, and legal disciplines. The Division's responsibilities cover three broad areas: risk and economic analysis; strategic research; and financial innovation.

Among the functions being performed by the Division are: (1) strategic and long-term analysis; (2) identifying new developments and trends in financial markets and systemic risk; (3) making recommendations as to how these new developments and trends affect the Commission's regulatory activities; (4) conducting research and analysis in furtherance and support of the functions of the Commission and its divisions and offices; and (5) providing training on new developments and trends and other matters.

__**Offices of the SEC:**__
 *  **Office of the General Counsel ** ||  **Office of the Chief Accountant **  || ====**Office of Compliance Inspections and Examinations**  ==== || ====<span style="font-family: 'Arial','sans-serif'; font-size: 10pt;">**Office of International Affairs**  ==== || ====<span style="display: block; margin-bottom: auto; margin-left: 0in; margin-right: 0in; margin-top: auto; text-align: center;"><span style="font-family: 'Arial','sans-serif'; font-size: 10pt;">**Office of Investor Education and Advocacy**  ==== || ====<span style="font-family: 'Arial','sans-serif'; font-size: 10pt; margin: auto 0in;">**Office of Information Technology** ==== || <span style="display: block; line-height: normal; margin-bottom: 10pt; margin-left: 0in; margin-right: 0in; margin-top: 0in; text-align: center;"> **<span style="font-family: 'Arial','sans-serif'; font-size: 10pt;">Office of FOIA and Records Management Services **  ||
 * <span style="display: block; line-height: normal; margin-bottom: 10pt; margin-left: 0in; margin-right: 0in; margin-top: 0in; text-align: center;"> **<span style="font-family: 'Arial','sans-serif'; font-size: 10pt;">Office of the Executive Director ** || <span style="display: block; line-height: normal; margin-bottom: 10pt; margin-left: 0in; margin-right: 0in; margin-top: 0in; text-align: center;"> **<span style="font-family: 'Arial','sans-serif'; font-size: 10pt;">Office of Legislative Affairs and Intergovernmental Relations **  || ====<span style="display: block; margin-bottom: auto; margin-left: 0in; margin-right: 0in; margin-top: auto; text-align: center;"><span style="font-family: 'Arial','sans-serif'; font-size: 10pt;">**Office of Public Affairs**  ==== || ====<span style="display: block; margin-bottom: auto; margin-left: 0in; margin-right: 0in; margin-top: auto; text-align: center;"><span style="font-family: 'Arial','sans-serif'; font-size: 10pt;">**Office of the Secretary**  ==== || ====<span style="display: block; margin-bottom: auto; margin-left: 0in; margin-right: 0in; margin-top: auto; text-align: center;"><span style="font-family: 'Arial','sans-serif'; font-size: 10pt;">**Office of Equal Employment Opportunity**  ==== || ====<span style="display: block; margin-bottom: auto; margin-left: 0in; margin-right: 0in; margin-top: auto; text-align: center;"><span style="font-family: 'Arial','sans-serif'; font-size: 10pt;">**Office of the Inspector General**  ==== || <span style="display: block; line-height: normal; margin-bottom: 10pt; margin-left: 0in; margin-right: 0in; margin-top: 0in; text-align: center;"> **<span style="font-family: 'Arial','sans-serif'; font-size: 10pt;">Office of Administrative Law Judges **  ||

Securities Act of 1933
Often referred to as the "truth in securities" law, the Securities Act of 1933 has two basic objectives:
 * require that investors receive financial and other significant information concerning securities being offered for public sale


 * prohibit deceit, misrepresentations, and other fraud in the sale of securities

The full text of this Act is available at: [].

Securities Exchange Act of 1934
With this Act, Congress created the Securities and Exchange Commission. The Act empowers the SEC with broad authority over all aspects of the securities industry. This includes the power to register, regulate, and oversee brokerage firms, transfer agents, and clearing agencies as well as the nation's securities self regulatory organizations (SROs). The various stock exchanges, such as the New York Stock Exchange, and American Stock Exchange are SROs. The Financial Industry Regulatory Authority, which operates the NASDAQ system, is also an SRO.

Trust Indenture Act of 1939
This Act applies to debt securities such as bonds, debentures, and notes that are offered for public sale. Even though such securities may be registered under the Securities Act, they may not be offered for sale to the public unless a formal agreement between the issuer of bonds and the bondholder, known as the trust indenture, conforms to the standards of this Act. The full text of this Act can be read at: [].

Investment Company Act of 1940
This Act regulates the organization of companies, including mutual funds, that engage primarily in investing, reinvesting, and trading in securities, and whose own securities are offered to the investing public. The regulation is designed to minimize conflicts of interest that arise in these complex operations. The Act requires these companies to disclose their financial condition and investment policies to investors when stock is initially sold and, subsequently, on a regular basis. The focus of this Act is on disclosure to the investing public of information about the fund and its investment objectives, as well as on investment company structure and operations. It is important to remember that the Act does not permit the SEC to directly supervise the investment decisions or activities of these companies or judge the merits of their investments. The full text of this Act is available at: [].

Investment Advisers Act of 1940
This law regulates investment advisers. With certain exceptions, this Act requires that firms or sole practitioners compensated for advising others about securities investments must register with the SEC and conform to regulations designed to protect investors. Since the Act was amended in 1996, generally only advisers who have at least $25 million of assets under management or advise a registered investment company must register with the Commission. The full text of this Act is available at: [].

Sarbanes-Oxley Act of 2002
On July 30, 2002, President Bush signed into law the Sarbanes-Oxley Act of 2002, which he characterized as "the most far reaching reforms of American business practices since the time of Franklin Delano Roosevelt." The Act mandated a number of reforms to enhance corporate responsibility, enhance financial disclosures and combat corporate and accounting fraud, and created the "Public Company Accounting Oversight Board," also known as the PCAOB, to oversee the activities of the auditing profession. The full text of the Act is available at: []. You can find links to all Commission rulemaking and reports issued under the Sarbanes-Oxley Act at: [].

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