Securities and Exchanges Commission (SEC)

securities and exchanges commissionThe U.S. Securities and Exchange Commission (abbreviation SEC) was founded in the early 1930’s according to the Securities Act of 1933 along with the Securities Exchange Act of 1934. These were the years of deep American Depression and the global crisis around the whole Western Europe. Everything started in the year of 1929 just after the Stock Market had crashed and thousands of investors and credit institutions lost huge amounts of their funds. Thus, the Congress had to make some quick and efficient decisions to restore the public's faith in the capital markets and establishing of the U.S. SEC was one of such decisions. The main purpose of those times SEC was to renew investors’ trust in the USA capital markets. Thereby SEC started to provide all kinds of investors and market involved participants with reliable information and formed some clear rules to secure honest dealing.

As for today, SEC controls the major Securities World Participants, including securities brokers and dealers, securities exchanges, mutual funds and investment consulting companies (advisors). The U.S. Securities and Exchange Commission is primarily concerned in promoting the disclosure of general financial market-related data, securing honest dealing, and protecting investors against fraudulent firms activities. SEC also supports investor education by offering the public a rich variety of essential disclosure documents and other informational materials.

Being a state regulation authority, SEC closely cooperates with the U.S. Congress, various federal agencies and organizations of the private sector.

SEC Structure

The SEC administration officially includes a Chairman who is assigned by the U.S. President as the Commission's chief executive and another 4 Members (Commissioners). All the SEC Commissioners are designated for a five-year term service and not more than 3 of them can belong to the same political party. The SEC Agency’s headquarters including 5 Divisions and 18 Offices are situated in Washington DC (there are also 11 Regional Offices which are situated around the USA).

Five Agency’s Divisions include:

  • Division of Corporation Finance
  • Division of Trading and Markets
  • Division of Investment Management
  • Division of Enforcement
  • Division of Risk, Strategy, and Financial Innovation

 The U.S. SEC is responsible for:

  • interpretation of federal securities laws;
  • development of new and improvement of the existing rules;
  • control (inspection) of the securities organizations, investment consulting firms and brokers;
  • monitoring private regulatory companies in the field of securities, auditing and accounting;
  • coordination of the USA securities regulation with federal and foreign authorities.

View Organization of the SEC page for more specific information on the U.S. SEC Structure.


SEC Brief Summary

Brokerage firms which act under the guidelines of the U.S. Securities and Exchange Commission (SEC) are surely reliable companies which guarantee their clients honest and qualified trading. We at strongly recommend all traders looking for new broker partners to pay attention at the regulating authorities the estimated brokers are regulated by. Having a license of at least one of the Broker Regulation organizations should be considered as an advantage among the unregulated or partly regulated brokerage companies.

SEC website:

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