The U. S. Securities and Exchange Commission In economic society, most people like to invest their fortunes in the capital market and security market.
As more and more investors join in the investing market which is very complex and fascinating, and it can be successful. Unlike the deposits are hypothecated by the federal government, stocks, bonds and other securities can lose value in capital market because their no surety.So the security and exchange commission play an important role in the capital market, and the important thing is the security and exchange commission demands the public companies should be disclose the meaningful financial and other information to the public. This provides an equitable environment and common knowledge for the investors who can make a decision for buy, sell or hold a security. The security and exchange commission supervises the key participants in the securities market, which contains securities brokers and dealers, securities exchanges, investment advisors, and mutual funds.The security and exchange commission is concerned primarily with promoting the disclosure of important market-related information, maintaining fair dealing, and protecting against fraud. Every year, the security and exchange commission works closely with other institutions, such as Congress, other federal departments and agencies, the self-regulatory organizations, state securities regulators, and various private sector organizations.
The other thing is the security and exchange commission use the securities laws to deal with civil enforcement actions against individuals and companies which has typical infractions.The responsibility of the U. S. security and exchange commission is to protect the investors, maintain fair, orderly, and efficient markets, and facilitate capital formation. This article is an overview of the Securities and Exchange Commission history, role of the division of different offices, how the Securities and Exchange Commission maintains market, and how Securities and Exchange Commission facilitates capital formation. (a)When, Why, and by What Authority the SEC was Formed The Securities and Exchange Commission was found in a special period and has a meaningful history.The mission of the Securities and Exchange Commission is to protect investors and make the market stability.
Before the Great Crash of 1929, fewness people support the federal regulation of the securities markets. After the post-World War I, the security activities increased faster, and the federal government required financial must prevent the fraudulent sale of stock and financial disclosed. During the 1920s, most investors found the advantage of the post-war prosperity, so they invested their money into stock market.When the Great Crash was occurred in 1929, investors lost their confidence for the markets plummeted. At the same time, banks who lent money to the investors lost much money ensuring Great Depression. In this background, there was a common sense to recover confidence of the investors for the stock market, so Congress held hearings to identify the problems and search for solutions. According the result of the hearing, Congress passed the Securities Act of 1933 during the Depression year.
The Securities and Exchange Commission was created base on this law and the Securities Exchange Act of 1934.The purpose was to restore the confidence of the investors in capital market and clear rules of honest dealing. Congress established the Securities and Exchange Commission in 1934, and implemented the newly-passed securities laws to promoted the capital and protect the investors. The important thing were monitored the securities industry, required companies should be offered securities for investment dollars, must told the public the truth about their businesses, the securities they were selling, and the risks involved in investing. b)The Role of the Division of Corporation Finance The role of the division corporation finance is that assists the Commission implement its responsibility to superintend corporate disclosure of important information to the investing public. Company must be obeying the regulations pertaining to disclosure that must be made when the initial stock is sold in the next period of time. The staff of division periodically reviews the disclosure documents submitted by the company.
The staff also provides assistance to explain the rules of the Commission to companies and recommend the new rules adopted by the Commission. The Division of Corporation Finance requires publicly-held companies should file the documents that reviewed by the Commission. These documents include registration statements for newly-offered securities, annual and quarterly filings (Forms 10-K and 10-Q), proxy materials sent to shareholders before an annual meeting, annual reports to shareholders, documents concerning ender offers, and filings related to mergers and acquisitions. The staff reviews and checks the documents by disclosure requirements to improve the quality of the disclosure documents by the publicly-held companies. The staff of Division offered guidance and counseling to registrants, prospective registrants, and help the public obey the law. Corporation Finance provides administrative explanation of the Securities Act of 1933, the Securities Exchange Act of 1934, and the Trust Indenture Act of 1939, and recommends regulations to implement these statutes.Working closely with the Financial Accounting Standards Board (FASB), generally accepted accounting principles (GAAP).
Corporation Finance uses a more formal manner is no-action letters to issue guidance. Corporation Finance also monitors the use by U. S. registrants of International Financial Reporting Standards (IFRS), issued by the International Accounting Standards Board. (c)The Role of the Division of Trading and Marketing The role of the Division of Trading and Marketing is that assists the Commission implement its responsibility for maintaining fair, orderly, and efficient markets.The Division’s staff provides monitor major participants of the securities market, such as 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.The Division also monitors Securities Investor Protection Corporation (SIPC) that makes sure securities and cash in the customer accounts of the failed member brokerage firms.
The additional responsibilities of Division include enforce financial integrity program for broker-dealers of the Commission, reviewing recommended new rules and change to existing rules submit by the SROs, assist the Commission to establish rules and publish interpretations on matters affecting the operation of the securities markets, and monitor the markets. d)The Role of the Division of Investment Management The role of the Division of Investment Management is that assists the Commission implement its responsibility for investor protection and for promoting capital formation through oversight and regulation of America’s $26 trillion investment management industry. This is an important part of capital markets include investment advisers and professional fund managers who advise customer exchange-traded mutual funds and other investments that monitored by the Division.The Division of the Investment Management insures the disclosures about the investment useful by the customers who can accept the regulatory costs. The additional responsibilities of Division include advising the Commission on adapting SEC rules to new circumstances, responding to no-action requests and requests for exceptive relief, reviewing investment company and investment adviser filings. The Division assisting the Commission in enforcement matters involving investment companies and advisers, assisting the Commission in interpreting laws and regulations for the public, and enforcement staff. e)The Role of the Division of Enforcement The security and exchange commission is a enforce agency of law.
The role of the Division of Enforcement is that assists the Commission implement 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 a civil enforcement authority of the SEC, Division working closely with law enforcement agencies and bring criminal cases when appropriate around the world. The division acquires evidence from different souses. All investigations of the SEC are conducted privately. Through informal inquiry, interviewing witnesses, examining brokerage records, reviewing trading data, and other methods, Division’s staff may find some violations of the securities laws and provide its investigations to Commission who can authorize the staff bring an administrative action or to file a case in federal court.The Commission can make a decision with party to settle a matter without trial. (f)How the Securities and Exchange Commission Protects Investors The SEC is the truly “the Investor’s Advocate” and there has an Office of Investor Education and Advocacy to assist the Commission in ensuring that in all of the agency’s activities to serves individual investors who have problems when the agency takes action.
The responsibility of the office’s policy and Investor Outreach review all agency action from the perspective of the individual investor.The investor disclosures are written by plain English and interactive data format is provided by the agency’s technology initiatives. The responsibility of the Office Investor Advocacy has for acting on investor tips, complaints and suggestions. Investors contact the SEC use the agency’s online to ask questions on a wide range of securities-related topics, to complain about problems with their investments or their financial professionals, or to suggest improvements to the agency’s regulations and procedures.The specialists and attorneys are trained by SEC, they provide information for these investors, find out informal resolutions of their complaints, and accept their good ideas to the Commission and agency’s staff. The illegal or abnormal activities of trend information from investor reports are provided critical intelligence to other SEC offices and divisions. The Office of Investor Education’s responsibility is the SEC’s investor education program.
The major working is to guard against fraud for seniors.Also the investors can use the Securities laws to protect themselves, because the securities laws broadly prohibit fraudulent activities of any kind in connection with the offer, purchase, or sale of securities. An important aspect of the SEC’s reasonability is the disclosure of important financial and corporate information to the public. Through the Division of Corporate Finance, the SEC insures that corporate information is made issued available to investors as a result of obedience of corporations with the SEC regulations. g)The Meaning of Fair, Orderly, and Efficient Markets and How SEC Maintains Market in Such Fashion The meaning of fair, orderly, and efficient markets has a simple and straightforward concept that all investors, whether large institutions or private individuals should be obey the laws, public companies to disclose meaningful financial and other information to the public, through the steady flow of timely, comprehensive, and accurate information can help people makes investment decisions when they are trading in the capital market.For establish the fair, orderly, and efficient market, the SEC adopts some measures, such as oversees the key participants in the securities world, including securities exchanges, securities brokers and dealers, investment advisors, and mutual funds, to issue typical infractions. The SEC requires the public companies to disclosure their meaningful financial and other information for the public.
The functions of SEC is a monitor body to against fraud in securities sales, illegal sales practices and market manipulation in order to protect market honesty and facilitate capital formation.Through the Division of Trading and Markets, the SEC reviews trading enforced by securities exchanges, securities brokers and dealers, investment advisors, mutual funds, transfer agents, credit rating agencies, and the Municipal Securities Rulemaking Board (MSRB) to ensure fair and orderly markets. The responsible Division of Trading and Markets is for enforcing the SEC’s financial integrity program for broker-dealers, reviewing and suggesting changes to existing rules filed, and surveil the markets.Second, to make sure the purpose is always being met, the SEC working with all major participants of market, contain to learn some experience from the investors and listen to their concerns in our securities markets. Finally, the SEC deals with thousands cases against individuals and companies for violation of the securities laws to protect all investors. Other else, the divisions and offices of the SEC could enforce their responsibility in the market. h)Capital Formation and How SEC Facilitates Capital Formation The meaning of the capital formation is used in macro-economics, national accounts, and financial economic.
Sometimes it is also used in corporation accounts. It defined three ways, such as it has a special statistical concept and used in national accounts statistics, econometrics and macroeconomics. According this meaning, it indicates amount by which the capital stock or physical capital stock of a country or an economic sector in an accounting interval increased during an accounting period.As a modern general term for capital accumulation it is used in economic theory. In more recent times, Capital Formation has been used in financial economics to refer to savings drives, setting up financial institutions, fiscal measures, public borrowing, development of capital markets, privatization of financial institutions, and development of secondary financial markets. The SEC was established in 1934, which is an independent agency of the U. S.
Government. Its responsibility for enforce and enhance of the federal securities laws. Attempt to protect investors against fraud in the sale of securities.The SEC’s role to insure the operate information is issued available to investors who can make investment decisions. In this context, the responsibility of SEC is for the rule of the behaviors of securities professionals and the orderly and efficient functioning of the markets to facilitate capital formation. The SEC maintains neutrality in resolving disputes. The fair, orderly, and efficient markets would attract investors and institutions to invest and trade their capital.
The EEO Office is an independent office of any other SEC office.The EEO Office’s mission is to prevent employment discrimination, including discriminatory harassment, so that all SEC employees have the working environment to support them in their efforts to protect investors, maintain healthy markets, and promote capital formation. The Office of Public makes the work of the SEC open to the public, understandable to investors, and accountable to taxpayers. It helps every other SEC Divisions and Offices accomplish the agency’s overall mission to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation.In conclusion, the SEC is the basic to the effective functioning of the U. S. economy.
It provides transparent markets and accurate information to institutional and individual investors. In this way, investor’s confidence in the U. S. stock market becomes stronger and the corporations would like invest and development of their securities in the fair condition. For a long time, the SEC contributes for the American society stability and confidence.
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