SEC (The United States Securities and Exchange Commission)  - is the Securities and Exchange, which is an agency of the state government, is a principal organ for supervising and regulating the U.S. securities market. SEC works since 1934, when it was established under President Roosevelt.

Main objective pursued by the creators of the Commission - activities aimed at restoring investor confidence in the stock market, which has been lost over the years during the Great Depression. In addition, the agency aims to support an effective, transparent and fair operation of the market and the promotion of equity.

The first SEC head Joseph Kennedy - father of John F. Kennedy, the future president of the country. The first law regulating the activities of the Commission, was a document entitled the Law on Trade Securities, dated 1934 year. SEC has five commissioners appointed by the President and confirmed by the Senate. The Commission's work is regulated in such a way as to promote the maximum disclosure and investor protection.

The work is guided by the following SEC regulations:

  1. Securities Law (1933).
  2. Law of the trust agreement (1939).
  3. Investment Company Act (1940).
  4. The Law on Investment Advisers (1940).
  5. Sarbanes-Oxley Act (2002).

The main functions of SEC:

  1. Control over compliance with federal laws concerning the operation of financial markets.
  2. Oversight of the securities market and protecting investors from fraud and manipulation.
  3. Control over the access of investors to significant financial and other information required to provide public companies.
  4. Setting up rules for the registration of securities offered for sale, as well as performance of capital markets and stock exchanges.
  5. Supervision of private regulators, accounting and auditing.
  6. Control of corporate takeovers in the U.S.. For example, in case of purchase of more than five percent of a company's equity, the buyer is obliged to inform the Commission, as in this situation, there is a risk of absorption.

The reason for the investigation by the SEC could provide:

  1. Failure to provide important information about securities or misrepresentation.
  2. Manipulation of the market value of the securities.
  3. Theft of securities or funds of the client.
  4. Violation of the principle of fair treatment of a broker-dealer to the customer.
  5. Insider Trading
  6. Selling unregistered securities.


License SEC estimated rating of Forex Brokers in 70 points.