Question

The SEC is the watchdog of our financial markets and arguably one of the most influential government regulatory agencies. In a paragraph or two, describe the general organization and characteristics of the SEC. Then, in a paragraph or two for each, identify each of the divisions of the SEC and explain the major purpose and function for each.  If there is anything new since the book was printed, please note this.Use the text and reference it!

Answer 1

SEC-stands for Securities and Exchange Commission

It has three part mission.

1. protecting investors

2. maintaining fair and orderly functioning of securities market.

3. facilitating capital formation.

It was created in 1934 to protect investors against fraudulent practices in the market.

CHARACTERISTICS OF SEC

1. It provides transparency in the financial performance of US companies.

2. It protects investors from dangerous or illegal financial practices.

3. Investors can obtain accurate and consistent information on corporate profitability.

4. The SEC can bring only civil actions against lawbreakers, but works with the Justice Department on criminal cases.

SEC consist of five divisions and 23 offices

five divisions

1. Division of corporate finance : - It provides material information such as information of company's financial prospects or stock price. It helps in investment decisions.

2. Division of enforcement :- It investigates cases, prosecuting civil suits and administrative proceedings.

3. Division of Investment management: - This division helps to regulate investment companies, variable insurance products, etc.

4. Division of Economic and Risk analysis:- It integrates economics and data analysis into the core mission of SEC

5. Division of Trading and Market:- It establishes and maintain standard for efficient market.