The Function Of The SEC


The SEC, an independent agency of the U.S. Government, was established by Congress in 1934 to administer the federal securities laws. It is headed by five Commissioners, appointed by the President, who direct a staff of lawyers, accountants, financial analysts, and other professionals.

The staff operates from its headquarters in Washington, D.C. and from five regional offices and six district offices in major financial centers throughout the country.

The SEC's principal objectives are to ensure that the securities markets operate in a fair and orderly manner, that securities industry professionals deal fairly with their customers, and that corporations make public all material information about themselves so that investors can make informed investment decisions.

The SEC accomplishes these goals by: Mandating that companies disclose material business and financial information; Overseeing the operations of the SROs; Adopting rules with which those involved in the purchase and sale of securities must comply; and Filing lawsuits or taking other enforcement action

in cases where the law has been violated. Despite the many protections provided by federal and state securities laws and SRO rules, it is important for investors to remember that they have the ultimate responsibility for their own protection.

In particular, the SEC cannot guarantee the worth of any security. Investors must make their own judgments about the merits of an investment.

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