What is the function of the SEC in the financial industry?

What is the function of the SEC in the financial industry?

• A. Increase stock prices
• B. Oversee the exchange of securities to protect investors
• C. Regulate interest rates
• D. Facilitate bank transactions

Answer: (B)

The Securities and Exchange Commission (SEC) plays a crucial role in the financial industry by overseeing the exchange of securities to protect investors. Its primary mission is to ensure fairness in the markets, promote transparency, and prevent fraudulent activities that can harm investors. The SEC enforces securities laws, which require public companies to disclose truthful and accurate information about their financial condition and operations, thereby enabling investors to make informed decisions. By regulating the activities of securities exchanges, brokers, and dealers, the SEC fosters an environment of trust and integrity in the marketplace. This protective oversight helps maintain investor confidence, which is vital for the functioning of the financial markets. Additionally, the SEC has the authority to investigate and take action against individuals or entities that violate securities laws, further reinforcing its protective role.

The Securities and Exchange Commission (SEC) plays a crucial role in the financial industry by overseeing the exchange of securities to protect investors. Its primary mission is to ensure fairness in the markets, promote transparency, and prevent fraudulent activities that can harm investors. The SEC enforces securities laws, which require public companies to disclose truthful and accurate information about their financial condition and operations, thereby enabling investors to make informed decisions.

By regulating the activities of securities exchanges, brokers, and dealers, the SEC fosters an environment of trust and integrity in the marketplace. This protective oversight helps maintain investor confidence, which is vital for the functioning of the financial markets. Additionally, the SEC has the authority to investigate and take action against individuals or entities that violate securities laws, further reinforcing its protective role.