How do sunshine laws help investors?

By Steven Merkel AAA
A:

Sunshine laws are U.S. federal and state laws that require regulatory authorities' meetings, decisions and records to be made available to the public. Sunshine laws were first created in the mid-1970s in a bid to increase public disclosure of governmental agencies. Sunshine laws do not allow all citizens to attend meetings, but they do ensure that media and representatives of the public can attend. In addition, the Freedom of Information Act requires agencies to share information they have obtained with the public, allowing their decisions and records to be disclosed.

The disclosure of information due to implementation of sunshine laws gives investors a fair opportunity to review public documents prior to investing in government- or agency-related securities. Investors can review financial statements and other meeting decisions that might affect the performance or underperformance of a particular investment prior to purchase. These essential laws also afford citizens the ability to see behind the curtain of government and remain involved in the processes that affect their lives and any investments they might have made in relation to the government entity. Sunshine laws force governments to maintain accountability, which is critical to keeping the government on sound footing.

For more on this topic, read The Federal Reserve: Introduction.

This question was answered by Steven Merkel.

RELATED FAQS

  1. I get multiple mailings to my house from companies that my spouse, children and I ...

    It's not uncommon for there to be more than one investment account holder in one household. If multiple members of your household ...
  2. What are unregistered securities or stocks?

    Before securities, like stocks, bonds and notes, can be offered for sale to the public, they first must be registered with ...
  3. How does FINRA differ from the SEC?

    With all the financial organizations out there, knowing what they all do can be as complicated as knowing where to invest. ...
  4. Are there regulations against monopolies?

    A monopoly occurs when a single company or group owns all or nearly all of the market for a particular type of product or ...
RELATED TERMS
  1. Appraised Equity Capital

    The excess of the market value of an asset over its book value. ...
  2. Asset Liquidation Agreement (ALA)

    A contract between the Federal Deposit Insurance Corporation ...
  3. Adverse Domination

    A legal doctrine that allows regulators to bring litigation against ...
  4. Affordable Market Value (AMV)

    The sale price of a multi-family residential housing unit sold ...
  5. Financial Action Task Force (FATF)

    An intergovernmental organization that designs and promotes policies ...
  6. patent attorney

    A lawyer with expertise in intellectual property law as it pertains ...
comments powered by Disqus
Related Articles
  1. Six Economic Reasons For Hong Kong Independence ...
    Economics

    Six Economic Reasons For Hong Kong Independence ...

  2. Two Lessons from Last Week’s Sell-Off
    Investing News

    Two Lessons from Last Week’s Sell-Off

  3. Your Investments Should Be Bigger Than ...
    Investing Basics

    Your Investments Should Be Bigger Than ...

  4. Material Adverse Effect A Warning Sign ...
    Markets

    Material Adverse Effect A Warning Sign ...

  5. SEC Filings: Forms You Need To Know
    Investing Basics

    SEC Filings: Forms You Need To Know

Trading Center