Securities and Exchange Commission SEC is an independent federal government regulatory agency responsible for protecting investors, maintaining fair and orderly functioning of the securities markets , and facilitating capital formation.
It was created by Congress in as the first federal regulator of the securities markets. The SEC promotes full public disclosure, protects investors against fraudulent and manipulative practices in the market, and monitors corporate takeover actions in the United States. It also approves registration statements for bookrunners among underwriting firms.
Generally, issues of securities offered in interstate commerce, through the mail or on the Internet, must be registered with the SEC before they can be sold to investors. Financial services firms—such as broker-dealers, advisory firms and asset managers, as well as their professional representatives—must also register with the SEC to conduct business.
In example: they would be responsible for approving any formal bitcoin exchange. The SEC's primary function is to oversee organizations and individuals in the securities markets, including securities exchanges, brokerage firms, dealers, investment advisors, and investment funds. Through established securities rules and regulations, the SEC promotes disclosure and sharing of market-related information, fair dealing, and protection against fraud.
It provides investors with access to registration statements, periodic financial reports, and other securities forms through its electronic data-gathering, analysis, and retrieval database, known as EDGAR. The Securities And Exchange Commission SEC was created in to help restore investor confidence in the wake of the stock market crash.
The SEC is headed by five commissioners who are appointed by the president, one of whom is designated as chair. Each commissioner's term lasts five years, but they may serve for an additional 18 months until a replacement is found.
To promote nonpartisanship, the law requires that no more than three of the five commissioners come from the same political party. The SEC consists of five divisions and 24 offices. Their goals are to interpret and take enforcement actions on securities laws, issue new rules, provide oversight of securities institutions, and coordinate regulation among different levels of government.
The five divisions and their respective roles are:. The SEC is allowed to bring only civil actions, either in federal court or before an administrative judge. Criminal cases fall under the jurisdiction of law enforcement agencies within the Department of Justice; however, the SEC often works closely with such agencies to provide evidence and assist with court proceedings.
In civil suits, the SEC seeks two main sanctions:. Among all the SEC's offices, the Office of the Whistleblower stands out as one of the most potent means of securities law enforcement. When the U. Because many had previously provided false or misleading information, public faith in the integrity of the securities markets plunged. The SEC's primary tasks were to ensure that companies made truthful statements about their businesses and that brokers, dealers, and exchanges treated investors in an honest and fair manner.
In the years since additional laws have aided the SEC in its mission:. Today the SEC brings numerous civil enforcement actions against firms and individuals that violate securities laws every year. It is our job to be responsive and innovative in the face of significant market developments and trends. As technological advancements and commercial developments have changed how our securities markets operate, our ability to remain an effective regulator requires us to continuously monitor the market environment and, as appropriate, adjust and modernize our expertise, rules, regulations, and oversight tools and activities.
Learn more about our active engagement with innovators, developers, and entrepreneurs by visiting our Strategic Hub for Innovation and Financial Technology. And since making Wall Street work for Main Street means gathering input from investors directly, please tell us about your own experiences and let us know what you think about our various proposed rules. As we go forward, our longstanding three-part mission remains our touchstone. We continue to review and recalibrate our efforts as we strive to fulfill that mission by elevating our performance through technology, data analytics, and human capital.
We continue to innovate in response to evolving markets and inspire the full confidence of the investing public and market participants alike. And we continue to focus on the interests of long-term Main Street investors who are entrusting their hard-earned savings to our securities markets to fund home purchases, college educations, and other important life events.
Read our Strategic Plan. World Investor Week The SEC celebrated World Investor Week, a global campaign to raise awareness about the importance of investor education and protection.
Registration of Two Digital Tokens Halted. E-mail Updates. We Inform and Protect Investors. Protect Your Money! Advance Fee Fraud. Form K. Variable Annuities. July 27, The Ombudsman will listen to your inquiries, complaints, and issues, review the information you provide, and help identify procedures, options, and resources. The Ombudsman is also available to clarify certain SEC decisions, policies, and practices, and serve as an alternate channel of communication between retail investors and the SEC.
We Facilitate Capital Formation. Small Business. Check out our new Small Biz site, with info to help companies that want to raise capital.
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