Tuesday, July 23, 2019

The US Securities Exchange Commission (SEC) Essay Example for Free

The US Securities Exchange Commission (SEC) Essay The US Securities Exchange Commission (SEC) is a Federal law-enforcing agency that ensures certain statues and regulations are followed in the US Securities markets. It protects the investors in the market, and at the same time maintains the integrity and the strength of the market. This would benefit not only the investors, but also other market stakeholders such as the public. Some of the important characteristics of the market ensured by the SEC include flexibility, stability, dynamics and sophistication. The SEC would also maintain freeness, fairness, order and efficiency in the markets. This would enable the capital to build and develop further. THE SEC believes in certain values such as integrity, responsibility, fairness, resourcefulness, teamwork and commitment for excellence (US SEC, 2006). The SEC was created in the year 1934, following the creation of the Securities Exchange Act, 1934. The Act was basically meant to protect the investors from financial crashes in the stock market. Following the World War-1, the people believed that the market was a place where they could transform from ‘rags to riches’. However, following the 1929-Great Stock market crash, people began to lose confidence in the markets. During the Great Depression period, investors lost great sums of money, and people began to lose hope that the market would ever recover. This was when the government stepped in and tried to frame laws for the betterment of the public. The Securities Act was mainly to ensure that the investor feels that the market is a safe place to invest. It help enable the investor to know more about the business of the company they are investing, the type of securities the company is selling and the risks involved during investing. The brokers, traders and sellers of the securities would have to treat the investor with respect, ensuring that their interest is maintained at all times (US SEC, 2007). The SEC consists of Commissioners who are being appointed by the President for a 5-year term. One of these commissioners is given the post of Chairman. These Commissioners have to be from different political parties. The SEC has 4 divisions and 18 offices. The headquarters of the SEC lies in Washington DC (US SEC, 2007). The SEC would perform several function including:- 1. Create new laws and modify the existing laws concerning securities 2. Help to comprehend the laws regarding securities 3. Monitor the market situation regarding securities especially the brokers, investors, traders, advisors, agencies, etc 4. Ensure that the private regulatory security organizations are functioning in a proper manner 5. Ensure that organizations outside the US are following the laws laid down in the Securities statue. (US SEC, 2007) References: U.S. Securities and Exchange Commission (2006). U.S. Securities and Exchange Commission2006 Performance and Accountability Report, Retrieved on November 3, 2007, from US SEC Web site: http://edgar.sec.gov/about/secpar/secpar2006.pdf U.S. Securities and Exchange Commission (2007). US The Investors Advocate: How the SEC Protects Investors, Maintains Market Integrity, and Facilitates Capital Formation, Retrieved on November 3, 2007, from US SEC Web site: http://www.sec.gov/about/whatwedo.shtml

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