Securities and Exchange Commission

The Securities and Exchange Commission (SEC) is an independent agency in the United States operating under the authority of the Federal government.

In particular, the SEC has a large mandate domestically, helping oversee and monitor markets and acting as a deterrent against fraud or abuse.

This includes enforcing federal securities laws, proposing securities rules, and regulating the US’ stock and options exchanges.

As one of the primary regulatory authorities in the US along with the Commodity Futures Trading Commission (CFTC), the SEC is responsible for the oversight of public companies.

What Does the SEC Do?

The SEC enforces statutory requirements that public companies and other regulated companies submit quarterly and annual reports.

These reports are crucial in unearthing or bringing to light any market abuse or improper action, ensuring a high degree of compliance out of market participants.

These reports are also essential in maintaining the transparency of equity markets, namely private companies.

Quarterly and semiannual reports from public companies are important for investors to make sound decisions when investing in the capital markets.

Investment in the capital markets is not guaranteed by the federal government with such safeguards put in place to add a layer of compliance for example.

The SEC is composed of five divisions: Corporate Finance, Trading and Markets, Investment Management, Enforcement, and Economic and Risk Analysis.

With 11 regional offices in the US, the SEC helps police markets nationwide.

In recent years the agency has also relied on additional forces for assistance as well, with the installment of the SEC Office of the Whistleblower.

Founded in 2010, the SEC Whistleblower program has since awarded over $400 million to whistleblowers.