Securities such as equities, debt and other investment issues are subject to the scrutiny of many Regulatory bodies and Laws. These affect investment instruments from there initial issue and through the life of the instrument right through when they are terminated via an acquisition or bankruptcy.
The problem is that these regulatory bodies comprise both governmental and trade organizations. In addition their roles and responsibilities vary.
This solution is a comprehensive overview of these regulations and laws. It permits the student to quickly obtain both an awareness of and and an understanding of these laws and regulations.
This is a compilation of all regulatory bodies and organizations. An outline of their roles and responsibilities is provided. In addition, an outline of Securities Laws is provided.
URL links to all sources are provided.
U.S. Securities and Exchange Commission (SEC)
The mission of the U.S. Securities and Exchange Commission is to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation.
As more and more first-time investors turn to the markets to help secure their futures, pay for homes, and send children to college, our investor protection mission is more compelling than ever.
As our nation's securities exchanges mature into global for-profit competitors, there is even greater need for sound market regulation.
And the common interest of all Americans in a growing economy that produces jobs, improves our standard of living, and protects the value of our savings means that all of the SEC's actions must be taken with an eye toward promoting the capital formation that is necessary to sustain economic growth.
The world of investing is fascinating and complex, and it can be very fruitful. But unlike the banking world, where deposits are guaranteed by the federal government, stocks, bonds and other securities can lose value. There are no guarantees. That's why investing is not a spectator sport. By far the best way for investors to protect the money they put into the securities markets is to do research and ask questions.
The laws and rules that govern the securities industry in the United States derive from a simple and straightforward concept: all investors, whether large institutions or private individuals, should have access to certain basic facts about an investment prior to buying it, and so long as they hold it. To achieve this, the SEC requires public companies to disclose meaningful financial and other information to the public. This provides a common pool of knowledge for all investors to use to judge for themselves whether to buy, sell, or hold a particular security. Only through the steady flow of timely, comprehensive, and accurate information can people make sound investment decisions.
The result of this information flow is a far more active, efficient, and transparent capital market that facilitates the capital formation so important to our nation's economy. To insure that this objective is always being met, the SEC continually works with all major market participants, including especially the investors in our securities markets, to listen to their concerns and to learn from their experience.
The SEC oversees the key participants in the securities world, including securities exchanges, securities brokers and dealers, investment advisors, and mutual funds. Here the SEC is concerned primarily with promoting the disclosure of important market-related information, maintaining fair dealing, and protecting against fraud.
Crucial to the SEC's effectiveness in each of these areas is its enforcement authority. Each year the SEC brings hundreds of civil enforcement actions against individuals and companies for violation of the securities laws. Typical infractions include insider trading, accounting fraud, and providing false or misleading information about securities and the companies that issue them.
One of the major sources of information on which the SEC relies to bring enforcement action is investors themselves ? another reason that educated and careful investors are so critical to the functioning of efficient markets. To help support investor education, the SEC offers the public a wealth of educational information on this Internet website, which also includes the EDGAR database of disclosure documents that public companies are required to file with the Commission.
Though it is the primary overseer and regulator of the U.S. securities markets, the SEC works closely with many other institutions, including Congress, other federal departments and agencies, the self-regulatory organizations (e.g. the stock exchanges), state securities regulators, and various private sector organizations. In particular, the Chairman of the SEC, together with the Chairman of the Federal Reserve, the Secretary of the Treasury, and the Chairman of the Commodities Futures Trading Commission, serves as a member of the President's Working Group on Financial Markets.
New York Stock Exchange NYSE
NYSE Regulation, Inc., is a not-for-profit subsidiary of NYSE Euronext dedicated to strengthening investor protection and market integrity. NYSE Euronext is the sole owner of New York Stock Exchange LLC, a New York limited liability company, which succeeds to the registered securities exchange status of the New York Stock Exchange. That company, in turn, operates through two wholly-owned subsidiaries, NYSE Market, Inc., a Delaware corporation, and NYSE Regulation, Inc., a New York Type A not-for-profit corporation.
This organizational structure preserves and extends the separation yet pervasive communication between business and regulatory activities achieved under the NYSE's previous governance architecture that was comprehensively reformed in 2003. It also seeks to insulate NYSE Regulation from the additional crosscurrents created by public ownership.
The chief executive officer of NYSE Regulation has primary responsibility for the regulatory oversight of the U.S. Exchange subsidiaries within NYSE Euronext and reports solely to the NYSE Regulation board of directors.
NYSE Regulation's board of directors is comprised of:
? six directors with no affiliation to the NYSE Euronext board nor any listed company or member organization
? three directors who are also NYSE Euronext directors, and
? one management director who serves as the chief executive officer of NYSE Regulation.
NYSE Euronext's chief executive officer does not have a seat on the NYSE Regulation board, nor does Regulation report to the NYSE Euronext CEO.
NYSE Regulation performs regulatory responsibilities for the New York Stock Exchange and NYSE Arca. It is comprised of a Market Surveillance division that monitors trading activities and investigates trading abuses by member organizations on the Floor and away from the Exchange, an Enforcement division that investigates and prosecutes related disciplinary actions, and a Listed Company Compliance division that ensures that companies listed on NYSE and on NYSE Arca meet their financial and corporate governance listing standards.
NYSE Rules include detailed regulations regarding the operations of member organizations. Other rules require NYSE listed companies to embrace premier standards of financial and corporate accountability and transparency.
Market Surveillance is the division responsible for monitoring trading activities on the Floor and trading "upstairs" by member firms, both on a real-time basis and after the fact.
The division surveils transactions to check for abusive or manipulative trading practices and insider trading by using sophisticated computer technology to detect any unusual or violative trading patterns. It also develops rules and evaluates specialist performance. Surveillance staff also maintains a ...
There are 11 major regulatory bodies and laws.
U.S. Securities and Exchange Commission (SEC)
New York Stock Exchange NYSE
American Stock Exchange
North American Securities Administrators Association (NASAA)
Financial Industry Regulatory Authority (FINRA)
Commodity Futures Trading Commission (CFTC)
Securities Exchange Act of 1934
Trust Indenture Act of 1939
Investment Company Act of 1940
Investment Advisers Act of 1940
Sarbanes-Oxley Act of 2002
Learn about the functions of these regulations and laws and how they impact investments in the US.