Month End Glossary

Securities and Exchange Commission (SEC)

The Securities and Exchange Commission (SEC) is a United States government agency that oversees and enforces securities laws to protect investors and promote fair and efficient markets.

The Securities and Exchange Commission (SEC) is the regulatory body of the United States federal government tasked with overseeing the securities industry, including stock exchanges, brokerage firms, investment advisors, and mutual funds. Its role is to ensure that markets operate transparently and efficiently by enforcing securities laws and enacting regulations to protect investors from fraud and other malpractices. Established by the U.S. Congress in 1934 during the aftermath of the stock market crash of 1929, the SEC's primary functions include registering new securities being offered for sale, ensuring that companies provide accurate and necessary information, and investigating violations of securities laws to prevent financial wrongdoing. The SEC also engages in rule-making to adapt to new developments in financial markets and technology. For example, a company must file a registration statement with the SEC before offering shares to the public during an IPO, containing financial disclosures to inform potential investors. This ensures transparency and fairness in the financial system.

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