Securities regulation in the United States

Securities regulation in the United States

Securities regulation in the United States is the field of U.S. law that covers various aspects of transactions and other dealings with securities. It includes both Federal and state level regulation by purely governmental regulatory agencies, most notably the Federal level United States Securities and Exchange Commission (SEC). There are also quasi-governmental organizations 'self regulatory organizations' (SRO's) such as the Financial Industry Regulatory Authority (FINRA) (formed by the merger of the enforcement divisions of the National Association of Securities Dealers, Inc. (NASD) and the New York Stock Exchange, Inc. (NYSE)). A significant influence is exerted by the availability of private rights of action under both state and Federal securities laws, as well as more generalized laws covering fraud. Futures and some aspects of derivatives are regulated by the Federal Commodity Futures Trading Commission (CFTC).

There are eight principal United States federal statutes in the area of securities regulation:

# The Securities Act of 1933
# The Securities Exchange Act of 1934
# The Public Utility Holding Company Act of 1935
# The Trust Indenture Act of 1939
# The Investment Company Act of 1940
# The Investment Advisers Act of 1940
# The Securities Investor Protection Act of 1970
# The Sarbanes-Oxley Act of 2002

There are also fairly extensive regulations under these laws, largely made by the SEC. One of these regulations, know by its citation 10b-5, is particularly notable because it creates and regulates federal civil liability in between private parties in transactions involving securities which are otherwise exempt from federal securities regulation.

State laws governing issuance and trading of securities are commonly referred to as blue sky laws.


Before the Wall Street Crash of 1929, there was little regulation of securities in the United States at the Federal level. The crash spurred the Congress to hold hearings, known as the Pecora Commission, after Ferdinand Pecora,

After holding hearings on the abuses, Congress passed the Securities Act of 1933. It regulates the interstate sales of securities and made it illegal to sell securities into a state without complying with the state law. It requires companies which want to sell securities publicly to file a registration statement with the U.S. Securities and Exchange Commission. The registration statement provides a lot of information about the company and is a matter of public record. The SEC does not approve or disapprove the issue, but lets the statement "become effective" if sufficient required detail is provided, including risk factors. Afterward, the company can begin selling the stock issue, usually through investment bankers.

The following year, Congress passed the Securities Exchange Act of 1934, which regulates the secondary market (general-public) trading of securities. Initially, the 1934 Act applied only to stock exchanges and their listed companies (as the word "Exchange" in the Act's name implies). In the late 1930s, the Act was amended to provide regulation of the over-the-counter (OTC) market (i.e., trades between individuals with no stock exchange involved). In 1964, the Act was amended to apply to companies traded in the OTC market.

In October 2000, the Securities and Exchange Commission ratified Regulation Fair Disclosure (Reg FD), which required publicly traded companies to disclose material information to all investors at the same time. Reg FD helped level the playing field for all investors by helping to reduce the problem of selective disclosure.

External links

* [ The Securities and Exchange Commission] Official site
* [ The Securities Law Home Page]
* [ Introduction to the Federal Securities Laws]

Wikimedia Foundation. 2010.

Игры ⚽ Нужно решить контрольную?

Look at other dictionaries:

  • Bank regulation in the United States — is highly fragmented compared to other G10 countries where most countries have only one bank regulator. In the U.S., banking is regulated at both the federal and state level. Depending on a banking organization s charter type and organizational… …   Wikipedia

  • Credit unions in the United States — Banking in the United States Monetary policy The Federal Reserve System Regulation Lending Credit card Deposit accounts Savings account Checking account Money market account Certificate of deposit …   Wikipedia

  • Automotive industry in the United States — The American automobile industry began in the 1890s and rapidly evolved into the largest automotive producer in the world through the use of mass production. The United States was the world s leader amongst motor vehicles main manufacturers many… …   Wikipedia

  • Economy of the United States — Economy of United States Rank 1st (nominal) / 1st (PPP) Currency US$ (USD) …   Wikipedia

  • Monetary policy of the United States — Banking in the United States Monetary policy The Federal Reserve System Regulation Lending Credit card Deposit accounts Savings account Checking account Money market account Certificate of deposit …   Wikipedia

  • Corporate law in the United States — is a collection of over 50 different systems of corporate law, or one law for each state. Two sources of law are, however particularly important: the Model Business Corporation Act (MBCA), drafted by the American Bar Association was influential… …   Wikipedia

  • Tort reform in the United States — refers to a topic of debate over the changes to the tort law system of liability and damages. While the phrase tort reform might imply any change in tort law or procedure, the commonly understood use in political and academic arenas describes a… …   Wikipedia

  • Retirement plans in the United States — A retirement plan is an arrangement to provide people with an income, possibly a pension, during retirement, when they are no longer earning a steady income from employment, or an asset from which a person may draw an income from as needed. There …   Wikipedia

  • Modern liberalism in the United States — This article discusses liberalism as that term is used in the United States in the 20th and 21st centuries. For the history and development of American liberalism, see Liberalism in the United States. For the origin and worldwide use of the term… …   Wikipedia

  • History of the United States Democratic Party — The History of the United States Democratic Party is an account of the oldest political party in the United States and arguably the oldest democratic party in the world. [citation | last=Witcover | first=Jules | year=2003 | chapter=1 | page=3.… …   Wikipedia

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”