Securities and Exchange Commission (SEC)

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Introduction to SEC

The Securities and Exchange Commission (SEC) was set up by the US Congress in 1934 as an individual, quasi-judicial regulatory agency during the period of Great Depression which followed the crash of 1929. The basic reason for establishing SEC was to regulate the stock market and avert corporate abuses associated to the contribution and sale of securities and corporate reporting. The SEC holds the power of licensing and regulating stock exchanges, the companies whose securities traded on them, and the dealers and brokers who carried out the trading.

Organizational Structure of the SEC

The SEC includes five Commissioners appointed by the US President with the consent and advice of the US Senate. Their terms last five years and are spread out thus making the term of each commissioner to end on June 5 of every year. Moreover, the SEC includes five main divisions as – Trading and Markets, Corporation Finance, Investment Management, Enforcement, and Risk, Strategy and Financial Innovation.

Main SEC Offices

The main SEC offices include:

  • The Office of General Counsel, acting as the agency’s “lawyer” before federal appellate courts and gives legal advice to the Commission as well as other SEC offices and divisions.
  • The Office of the Chief Accountant, which creates and enforces accounting and auditing policies laid down by the SEC.
  • The Office of the Compliance, Inspections, and Examinations, aims at inspecting stock exchanges, broker-dealers, credit rating agencies, registered investment companies, counting both open-end and closed-end investment companies, Registered Investment Advisors and money funds.
  • The Office of International Affairs represents the SEC abroad and negotiates international enforcement information.
  • The Office of Investor Education and Advocacy, aims at educating the public about securities markets and advises investors of fraud and stock market scandals.
  • The Office of Economic Analysis assists the SEC in estimating the economic costs and advantages of its various rules and regulations.
  • The Office of Information Technology supports the Commission and the SEC staff in every aspect of information technology.
  • Inspector General – The existing IG, H.David Kotz, has been serving since December, 2007 with a staff of 22 employees.

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