Securities and Exchange Commission (SEC)

The SEC was created by the Securities Exchange Act of 1934, following the 1929 stock market crash and the Great Depression, to restore confidence in markets.

Its main responsibilities include requiring public companies to disclose accurate financial and other information to investors; regulating stock exchanges, brokers, investment advisers and mutual funds; overseeing the registration of securities offerings; and investigating and bringing civil enforcement actions against insider trading, accounting fraud and other violations.

The SEC is led by five commissioners appointed by the US President and confirmed by the Senate, with no more than three from the same political party. One commissioner serves as chair.

For example, a company planning to go public in the United States must file a registration statement with the SEC disclosing its financial results, risks and business, and then file regular reports, such as annual and quarterly reports, once listed.

The SEC works alongside other bodies, such as FINRA, a self-regulatory organisation for brokers, and the Commodity Futures Trading Commission, which regulates most derivatives. The SEC’s approach to newer areas, such as crypto assets, has changed significantly with different leadership.