The Securities and Exchange Commission (SEC) is the U.S. government agency in charge of the nation's securities industry. It monitors transactions, as well as the activities of financial professionals. Its mission is to promote fairness, integrity and transparency; prevent fraud and other deceptive acts; and ensure orderly and efficient markets.
The SEC was launched following the stock market crash of 1929. The agency was part of the Securities Exchange Act of 1934, which was designed to bolster confidence in capital markets. It provided corporate and retail investors with reliable information and required that individuals and corporations deal with each other fairly and honestly.
Federal securities regulations and laws charge the SEC with a range of responsibilities, including the following:
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EDGAR is a system that enables companies and other entities to submit required information under the following laws:
The EDGAR database contains information that millions of companies and individuals have filed. According to the SEC, it manages about 3,000 filings a day and provides 3,000 terabytes of data a year.
The SEC created Regulation Systems Compliance and Integrity (Regulation SCI) in 2015. It's a set of rules that track the security and other technical capabilities of U.S. securities markets.
Regulation SCI came about in response to securities markets' increasing use of technology and IT automation. It provides oversight of the financial securities' markets use of IT. The goal of these rules is to minimize problems resulting from the industry's increasing dependence on technology. They also ensure there is a smooth and fast way for markets to recover when issues happen.
Issues that the regulation covers are referred to as SCI events. They include disruptions in the markets' systems, problems related to compliance, and security vulnerabilities and attacks.
Entities that Regulation SCI covers include clearing agencies, plan processors, self-regulatory groups and some alternative trading systems. These organizations must have IT policies and processes related to system capacity, integrity, resilience, availability and security. They are required to notify the SEC and take corrective action when an SCI event occurs. They also must conduct an annual review of their Regulation SCI procedures and report the results to the SEC.
The SEC has five commissioners who serve five-year terms. No more than three of the commissioners may belong to the same political party.
The agency has six major divisions:
SEC has 11 regional offices. Its subgroups include an office of Administrative Law Judges, an Advocate for Small Business Capital Formation, an Investor Advocate, and a Strategic Hub for Innovation and Financial Technology.
Learn more about the challenges of regulatory compliance and how they differ around the world.
27 Oct 2021