Securities and Exchange Commission (2024)




Financial regulation in the United States
Dodd-Frank Act
Federal Reserve
Financial regulation by state

Key terms
Commercial bank • Credit union • Depository institution • Financial system • Investment banking • Securities
Hover over the above terms for definitions.

The United States Securities and Exchange Commission (SEC) is an independent federal agency responsible for the regulation of the nation's securities industry. The agency enforces securities laws and proposes rules. The agency was established in 1934 with the passage of the Securities Exchange Act.^[1]

HIGHLIGHTS

Background

In 1933, the United States Congress passed a securities law that authorized the federal government to regulate interstate sales of securities. In 1934, Congress passed another securities law, which established the United States Securities and Exchange Commission. The commission was charged with enforcing federal securities laws and drafting regulations for the securities industry. President Franklin D. Roosevelt signed the act into law on June 6, 1934.^[1]^[2]

Organization

Administrative State

Read more about the administrative state on Ballotpedia.

Leadership

The SEC is headed by a five-member board of commissioners. Members are appointed by the president with the advice and consent of the United States Senate. The president does not have the authority to remove members once they are confirmed. No more than three commissioners may belong to the same political party. The president appoints one board member to serve as chair. Commissioners serve five-year terms, which are staggered so that one member's term ends on June 5 every year. A commissioner may serve an additional 18 months if no replacement is assigned to take his or her place at the time his or her term of office ends. The table below identifies the members of the SEC board as of February 2024.^[1]^[3]

SEC Commissioners, February 2024
Member	Position	Term started	Term ends
Gary Gensler	Chairman	2021	2026
Hester M. Peirce	Commissioner	2018	2025
Caroline A. Crenshaw	Commissioner	2020	2024
Jaime Lizárraga	Commissioner	2022	2027
Mark T. Uyeda	Commissioner	2022	2028
Source: Securities and Exchange Commission

Divisions

The SEC comprises six divisions, each responsible for different tasks. The six divisions are as follows:^[4]

Corporation Finance, which is responsible for overseeing disclosures and transaction registrations made by public companies.
Economic and Risk Analysis, which collects and uses economic data to advise other divisions.
Enforcement, which works with the other divisions to investigate violations of securities laws.
Examinations, which conducts the SEC's National Exam Program.
Investment Management, which is responsible for overseeing investment companies and advisers.
Trading and Markets, which responsible for overseeing self-regulatory organizations, such as broker-dealer firms and investment houses.

Authority and responsibilities

The SEC has authority to regulate the securities industry. This includes the authority to draft regulations for the industry. SEC regulations include requiring brokers to disclose financial information about the securities they offer to the public. In addition, the SEC has the power to enforce federal securities laws. The Enforcement Division of the SEC is tasked with investigating allegations of violations and bringing action against violators. The SEC can only bring civil action in a district court against violators. The SEC may refer violators to state and federal prosecutors to bring criminal charges.^[1]^[2]

External links

Federal Deposit Insurance Corporation

Footnotes

v•e The Administrative State

Main	The Administrative State Project main page • Administrative State Project Index • Glossary of administrative state terms • Quotes about the administrative state • Administrative state • Rulemaking • Deference • Adjudication • Nondelegation doctrine

Reporting	Changes to the Federal Register • Completed OIRA review of federal administrative agency rules • Federal agency rules repealed under the Congressional Review Act • Historical additions to the Federal Register, 1936-2016 • Pages added monthly to the Federal Register, 1995-2017

Laws	Administrative Procedure Act • Antiquities Act • Civil Service Reform Act • Clayton Antitrust Act • Communications Act of 1934 • Congressional Review Act • Electronic Freedom of Information Act • Federal Food, Drug, and Cosmetic Act of 1938 • Federal Housekeeping Statute • Federal Reserve Act • Federal Trade Commission Act of 1914 • Freedom of Information Act • Government in the Sunshine Act • Independent Offices Appropriations Act of 1952 • Information Quality Act • Interstate Commerce Act • National Labor Relations Act • Paperwork Reduction Act • Pendleton Act • Privacy Act of 1974 • Regulatory Flexibility Act • REINS Act • REINS Act (Wisconsin) • Securities Act of 1933 • Securities Exchange Act of 1934 • Sherman Antitrust Act • Small Business Regulatory Enforcement Fairness Act • Truth in Regulating Act • Unfunded Mandates Reform Act

Cases	Abbott Laboratories v. Gardner • A.L.A. Schechter Poultry Corp. v. United States • Association of Data Processing Service Organizations v. Camp • Auer v. Robbins • Chevron v. Natural Resources Defense Council • Citizens to Preserve Overton Park v. Volpe • Federal Trade Commission (FTC) v. Standard Oil Company of California • Field v. Clark • Food and Drug Administration v. Brown and Williamson Tobacco Corporation • Humphrey's Executor v. United States • Immigration and Naturalization Service (INS) v. Chadha • J.W. Hampton Jr. & Company v. United States • Lucia v. SEC • Marshall v. Barlow's • Massachusetts v. Environmental Protection Agency • Mistretta v. United States • National Federation of Independent Business (NFIB) v. Sebelius • National Labor Relations Board v. Noel Canning Company • National Labor Relations Board v. Sears, Roebuck & Co. • Panama Refining Co. v. Ryan • Securities and Exchange Commission v. Chenery Corporation • Skidmore v. Swift & Co. • United States v. Lopez • United States v. Western Pacific Railroad Co. • Universal Camera Corporation v. National Labor Relations Board • Vermont Yankee Nuclear Power Corp. v. Natural Resources Defense Council • Wayman v. Southard • Weyerhaeuser Company v. United States Fish and Wildlife Service • Whitman v. American Trucking Associations • Wickard v. Filburn • Wiener v. United States

Terms	Adjudication (administrative state) • Administrative judge • Administrative law • Administrative law judge • Administrative state • Arbitrary-or-capricious test • Auer deference • Barrier to entry • Bootleggers and Baptists • Chevron deference (doctrine) • Civil servant • Civil service • Code of Federal Regulations • Codify (administrative state) • Comment period • Compliance costs • Congressional Record • Coordination (administrative state) • Deference (administrative state) • Direct and indirect costs (administrative state) • Enabling statute • Ex parte communication (administrative state) • Executive agency • Federal law • Federal Register • Federalism • Final rule • Formal rulemaking • Formalism (law) • Functionalism (law) • Guidance (administrative state) • Hybrid rulemaking • Incorporation by reference • Independent federal agency • Informal rulemaking • Joint resolution of disapproval (administrative state) • Major rule • Negotiated rulemaking • Nondelegation doctrine • OIRA prompt letter • Organic statute • Pragmatism (law) • Precautionary principle • Promulgate • Proposed rule • Publication rulemaking • Regulatory budget • Regulatory capture • Regulatory dark matter • Regulatory impact analysis • Regulatory policy officer • Regulatory reform officer • Regulatory review • Rent seeking • Retrospective regulatory review • Risk assessment (administrative state) • Rulemaking • Separation of powers • Significant regulatory action • Skidmore deference • Statutory authority • Substantive law and procedural law • Sue and settle • Sunset provision • Unified Agenda of Federal Regulatory and Deregulatory Actions • United States Code • United States Statutes at Large

Bibliography	"Administrative Law - The 20th Century Bequeaths an 'Illegitimate Exotic' in Full and Terrifying Flower" by Stephen P. Dresch (2000) "Confronting the Administrative Threat" by Philip Hamburger and Tony Mills (2017) "Constitutionalism after the New Deal" by Cass R. Sunstein (1987) Federalist No. 23 by Alexander Hamilton (1787) "From Administrative State to Constitutional Government" by Joseph Postell (2012) "Interring the Nondelegation Doctrine" by Eric A. Posner and Adrian Vermeule (2002) "Rulemaking as Legislating" by Kathryn Watts (2015) "The Checks & Balances of the Regulatory State" by Paul R. Verkuil (2016) "The Myth of the Nondelegation Doctrine" by Keith E. Whittington and Jason Iuliano (2017) "The Progressive Origins of the Administrative State: Wilson, Goodnow, and Landis" by Ronald J. Pestritto (2007) "The Rise and Rise of the Administrative State" by Gary Lawson (1994) "The Study of Administration" by Woodrow Wilson (1887) "The Threat to Liberty" by Steven F. Hayward (2017) "Why the Modern Administrative State Is Inconsistent with the Rule of Law" by Richard A. Epstein (2008)

Agencies	Administrative Conference of the United States • United States Civil Service Commission • U.S. Government Accountability Office • U.S. Office of Information and Regulatory Affairs • U.S. Office of Management and Budget

v•e Ballotpedia

About	Overview • What people are saying • Support Ballotpedia • Contact • Contribute • Job opportunities

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Securities and Exchange Commission (2024)

FAQs

Is the Securities and Exchange Commission effective? ›

The SEC is critical to maintaining the integrity, stability, and vitality of our securities markets, and those markets are critical to a thriving economy. They provide funding to companies of all types and sizes, which can expand, create goods and services, and fuel the real economy.

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What problem was Securities and Exchange Commission trying to solve? ›

Protecting Investors

We protect investors by vigorously enforcing the federal securities laws to ensure truth and fairness. We deter misconduct, hold wrongdoers accountable, and provide resources to help investors evaluate their investment choices and protect themselves against fraud.

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What is the purpose of the Securities and Exchange Commission -- choose the correct answer --? ›

The Securities and Exchange Commission (SEC) oversees securities exchanges, securities brokers and dealers, investment advisors, and mutual funds in an effort to promote fair dealing, the disclosure of important market information, and to prevent fraud.

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What are the negatives of the Security Exchange Commission? ›

Over the last few years, the SEC has been criticized for (1) failing to “consistently and aggressively enforce the securities laws and protect investors and the public,” (2) obtaining sanctions that amount to only a slap on the wrist against major financial institutions, (3) settling rather than taking big banks to ...

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Why was the Securities and Exchange Commission successful? ›

The Glass-Steagall Act and the creation of the SEC and PUHCA helped restore investor confidence after the Great Depression by reducing deceitful trading, ensuring the public received all pertinent information about investment risks and limiting the practice of buying stocks on margin.

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Does the SEC still exist today? ›

Today, it continues to carry out its original mission to protect investors through the regulation and enforcement of securities laws.

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Can the SEC make laws? ›

Overall, the SEC engages in rulemaking and adjudications to create and enforce its regulations.

Who controls the SEC? ›

The SEC is an independent federal agency, established pursuant to the Securities Exchange Act of 1934, headed by a five-member Commission. The Commissioners are appointed by the President and confirmed by the Senate. The President designates one of the Commissioners as the Chair.

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How does the Securities and Exchange Commission protect us? ›

To protect the investing public, the SEC will continue to work toward ensuring markets are free of fraud, manipulation, and other misconduct—not only through its rulemaking, but through its enforcement and examination programs as well. Enforcement is about following the facts and the law, wherever they may lead.

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What did the SEC do during the Great Depression? ›

The crash led to Congress to passing the Securities Act of 1933 and the Securities Exchange Act of 1934. The SEC "was designed to restore investor confidence in our capital markets by providing investors and the markets with more reliable information and clear rules of honest dealing."