Securities And Exchange Commission - SEC

AAA

DEFINITION of 'Securities And Exchange Commission - SEC'

A government commission created by Congress to regulate the securities markets and protect investors. In addition to regulation and protection, it also monitors the corporate takeovers in the U.S. The SEC is composed of five commissioners appointed by the U.S. President and approved by the Senate. The statutes administered by the SEC are designed to promote full public disclosure and to protect the investing public against fraudulent and manipulative practices in the securities markets. Generally, most issues of securities offered in interstate commerce, through the mail or on the internet must be registered with the SEC.

INVESTOPEDIA EXPLAINS 'Securities And Exchange Commission - SEC'

Here's an example of an activity that falls within the SEC's domain: if someone purchases more than 5% of a company's equity, he or she must report to the SEC within 10 days of the purchase because of the takeover threats it may cause.

VIDEO

Loading the player...
RELATED TERMS
  1. Ombudsman

    An official who investigates complaints (usually lodged by private ...
  2. Financial Services Authority - ...

    Regulating body for all providers of financial services in the ...
  3. Federal Covered Advisor

    An investment advisor in the United States that manages more ...
  4. Letter Security

    A security that is not registered with the SEC, and therefore ...
  5. Regulation Fair Disclosure - Reg ...

    A rule passed by the Securities and Exchange Commission in an ...
  6. Watch List

    1. A list of securities being monitored closely by a brokerage ...
RELATED FAQS
  1. How can a company buy back shares to fend off a hostile takeover?

    There are several reasons why a company may choose to repurchase some or all of the outstanding shares of its stock. This ... Read Full Answer >>
  2. How does an underwriter syndicate work together on an initial public offering (IPO)?

    An underwriting syndicate is a group of investment banks that share the responsibility of marketing the shares of a company ... Read Full Answer >>
  3. How often should I measure my company's key performance metrics (KPIs)?

    Insider trading is a trade made with material and nonpublic information. Insider trading undermines the integrity of security ... Read Full Answer >>
  4. What sectors are best for an investor seeking a high annual return?

    A company receives a share premium whenever it receives money in excess of the face value (par value) of its shares. Corporations ... Read Full Answer >>
  5. If I write a blog post about stocks I own, is that considered insider trading?

    Writing a blog post about stocks you own is not considered insider trading. The only duty of the blogger is to disclose he ... Read Full Answer >>
  6. How is reconciliation treated under generally accepted accounting principles (GAAP)?

    The generally accepted accounting principles, or GAAP, provide different reconciliation rules for balancing many kinds of ... Read Full Answer >>
  7. How are asset management firms regulated?

    In principle, the asset management industry is largely governed by two bodies: the Securities and Exchange Commission (SEC) ... Read Full Answer >>
  8. How is the Chairman of the Securities and Exchange Commission (SEC) chosen?

    The Chairman of the Securities and Exchange Commission (SEC) is appointed personally by the president of the United States. ... Read Full Answer >>
  9. Why does executive compensation facilitate when a company buys back its stock?

    Stock buybacks facilitate executive compensations because a large part of executive compensation is usually stock-based. In ... Read Full Answer >>
  10. How did the financial crisis affect the banking sector?

    Over the short term, the financial crisis affected the banking sector by causing banks to lose money on mortgage defaults, ... Read Full Answer >>
  11. How are forward contracts regulated in the United States?

    Forward contracts are not regulated like most other derivatives such as futures or options. Compared to other financial instruments, ... Read Full Answer >>
  12. What percentage of asset management firms are privately held and not publicly traded?

    Approximately 10% of asset management firms are privately held companies. However, that figure is misleading because the ... Read Full Answer >>
  13. Is return on sales (ROS) the same as profit margin?

    In accounting and finance, return on sales, or ROS, is almost always the same as profit margin. Each term refers to a financial ... Read Full Answer >>
  14. What impact does government regulation have on the financial services sector?

    Government regulation affects the financial services industry in many ways, but the specific impact depends on the nature ... Read Full Answer >>
  15. What is a "pink sheet" in the context of an OTC (over-the-counter) transaction?

    In the over-the-counter (OTC) market, pink sheets are daily publications with bid and ask prices of over-the-counter stocks. ... Read Full Answer >>
  16. Who regulates a credit rating agency?

    Credit rating agencies are responsible for evaluating national and institutional debtors and their ability to pay back common, ... Read Full Answer >>
  17. What are the differences between a 10-K report and a firm's own annual report?

    Publicly traded companies in the United States are required to file a host of documents, and two of the most important, for ... Read Full Answer >>
  18. Where can I find a company's annual report and its SEC filings?

    Thanks to the Internet, finding financial reports is easier than ever. Nowadays, every reputable company has an investor ... Read Full Answer >>
  19. What happens to the fines collected by the Securities and Exchange Commission?

    When the Securities and Exchange Commission (SEC) enforces a civil action against a corporation or an individual found guilty ... Read Full Answer >>
Related Articles
  1. Investing

    What's the SEC?

    The Securities and Exchange Commission (SEC) is an independent agency of the United States government. The mission of the SEC is to enforce securities laws passed by congress. These laws aim ...
  2. Personal Finance

    Reg AC: What Does It Mean To Investors?

    In 2003, the SEC issued a new regulation meant to hold analysts more accountable for their reports. Find out what it means.
  3. Economics

    The SEC: A Brief History Of Regulation

    The SEC has continued to make the market a safer place and to learn from and adapt to new scandals and crises.
  4. Investing Basics

    Policing The Securities Market: An Overview Of The SEC

    Find out how this regulatory body protects the rights of investors.
  5. Personal Finance

    Who's Looking Out For Investors?

    If your account has been mishandled, FINRA and the SEC are among several organizations that can help.
  6. Professionals

    Alternatives Need More Education, Not Enforcement

    While disclosures and investor education need improvement, alternatives provide a valuable way to increase yield and hedge against declines.
  7. Taxes

    Explaining Progressive Tax

    A progressive tax is a levy in a tax system where the tax rate increases as the taxable base increases.
  8. Economics

    Chinese Opportunities For A Changing Child Policy

    China's one-child policy is changing, and investors are looking for ways to cash in. The reform might not have the effects that many anticipate, however.
  9. Taxes

    Tea Party Vs. Republican Party: Who Will Win In 2016?

    What agendas define the rift between the Tea Party and the Republican establishment, and which side will win the presidential nomination in 2016?
  10. Taxes

    Corporate Tax Rates: The Highs and the Lows

    The United States is No. 2 in the world for its high corporate tax rate. There are ways around paying it, and many nations with lower rates are worse off.

You May Also Like

Hot Definitions
  1. Stop-Loss Order

    An order placed with a broker to sell a security when it reaches a certain price. A stop-loss order is designed to limit ...
  2. Covered Call

    An options strategy whereby an investor holds a long position in an asset and writes (sells) call options on that same asset ...
  3. Butterfly Spread

    A neutral option strategy combining bull and bear spreads. Butterfly spreads use four option contracts with the same expiration ...
  4. Unlevered Beta

    A type of metric that compares the risk of an unlevered company to the risk of the market. The unlevered beta is the beta ...
  5. Moving Average - MA

    A widely used indicator in technical analysis that helps smooth out price action by filtering out the “noise” from random ...
  6. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
Trading Center