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Securities Exchange Commission - SEC

The stock market crash of the 1929 triggered the need for the creation of an institution to protect the investors for the potential negative consequences and future reoccurrences. The Securities Exchange Commission (also known as the SEC) was the institution that was established. The SEC continues to serve the same purposes today and increasing the scope of its purposes to the strengthening of the investors' confidence in the markets.

Every manager in charge of a mutual fund company should be prepared for an unexpected visit of one of SEC's officers. They will probably ask for the preparations of the company in order to make the necessary revisions. Remember, that this officer has the power to close down the company in case any error or evidence of misdoing occurs.

It is possible for the securities exchange commission officers to check the level of your company's preparedness to face any future changes about to occur. Even though most of them appear very friendly, this amiable image doesn't mean in no way that the officers don't take their job with the required seriousness. Just the contrary, they are ready to study your company with great meticulousness.

Securities Exchange Commission Regulations

The scope of SEC regulations encompasses the issues concerning the securities market. It has been extremely active in prosecuting individuals and companies who has violated any of its rules. The groups that the securities exchange commission regulates include the following:

  • Investment advisors
  • Broker-dealers
  • Public companies
  • Mutual funds
  • Individuals

Some of the issues that the SEC scrutinizes with great vigilance are:

  • Account fraud
  • Insider trading
  • False information about securities

The securities exchange commission has greatly decreased the trend toward fraud in the securities market, thanks to its strict regulations, which has resulted in higher market stability.

SEC Advances

The SEC has been committed to the provision of exhaustive information to investors. This is greatly facilitated by SEC's website. In case you have any doubts concerning the investment advisor you want to sign in with, you can go to the information page of securities exchange commission that includes broker and advisor details. You can check the actual filings of the advisor under consideration. As a result information on the professional qualifications and experience, fees and other arrangements can be obtained. Additionally, you are provided with the opportunity to review the validity of the recommendations of different financial analysts by referring to SEC's sections including online publications. You can also browse SEC's website through a question search page.

SEC Omissions

There are many cases reported by outside experts about scandals that have not been revealed by SEC officers. As a result, the securities exchange commission attempted to enhance its procedures in order to be better able to discover investment scandals in such areas as:

  • Mutual funds
  • Hedge funds
  • Investment advisors
  • Brokerages
  • Banking industry

Even though the SEC has made many improvements in its activities, more resources should be allocated toward the education of the general public. This is needed since there is an increasing number of swindlers who wait for their opportunity to deceive the uneducated investor.

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