Financial and Securities - The Securities Exchange Act of 1934

Congress established the Securities and Exchange Commission via the Securities Exchange Act of 1934. Through the Act, the SEC is empowered with comprehensive authority over the whole securities industry. This covers the power to register, control, and manage clearing agencies, brokerage firms, securities self regulatory organizations (SROs), and transfer agents. The New York Stock Exchange and the Chicago Board of Options are examples of SROs, and so is the Financial Industry Regulatory Authority (FINRA).

The Act also singles out and forbids particular types of actions in the markets and gives the Commission authority to discipline regulated entities and people who are associated with them.

Moreover, the Act gives the SEC authority to require companies with publicly traded securities to submit reports on a regular basis.

Corporate Reporting

Companies that own assets in excess of $10 million and whose securities are held by no less than 500 owners have to file reports yearly along with other needed periodic reports. Such reports are open to the public through the SEC's EDGAR database.

Proxy Solicitations

The Securities Exchange Act also has power over the disclosure in materials intended to win shareholders' votes in annual or other meetings set for electing directors and approving of other corporate action. This information, which is contained in proxy materials, should be filed with the Commission ahead of any solicitation to guarantee compliance with the disclosure rules. Whether by management or shareholder groups, solicitations should express all key facts that concern the issues that holders are to vote on.

Tender Offers

As per the Securities Exchange Act, there should be a disclosure of all pertinent facts by any person who would like to acquire in excess of 5 percent of a company's securities, whether by direct purchase or tender offer. In most cases, such an offer is made in order to acquire control over the company. Like the proxy rules, this lets shareholders make educated decisions on such major corporate developments. Learn more from

Insider Trading

The securities laws extensively disallow illegal activities of any nature as per the offer, purchase, or sale of securities. Behind various types of disciplinary actions are these provisions, including against cases of illegal insider trading. 

Registration of Exchanges, Associations, and Others 

The Act requires a many different market participants to register with the Commission, like exchanges, transfer agents, and the restUnder the Act, various market participants should register with the Commission, such as brokers and dealers, clearing agencies, etc. Registration for these organizations means filing of regularly updated disclosure documents. Learn more from

As mentioned, the exchanges and the Financial Industry Regulatory Authority (FINRA) are both self-regulatory organizations (SROs). SROs should establish rules on disciplining members for unacceptable conduct and on applying measures that uphold investor protection and market integrity. Proposed SRO rules have to be reviewed by the SEC and published for the public to provide their feedback.

Read more here:

This site was built using