What Role Does the SEC Have in Regulating RIAs?
The U.S. Securities and Exchange Commission (SEC) role is to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation.
The common interest of all Americans in a growing economy that produces jobs, improves our standard of living, and protects the value of our savings means that all of the SEC’s actions must be taken with an eye toward promoting the capital formation that is necessary to sustain economic growth.
The SEC requires public companies to disclose meaningful financial and other information to the public to provide all investors, whether large institutions or private individuals, with access to certain basic facts about an investment prior to buying it, and so long as they hold it. This allows investors to make sound investment decisions by researching from a common pool of knowledge.
To insure that the result of this information flow is being met the SEC continually works with all major market participants to listen to their concerns and to learn from their experience. This provides a far more active, efficient, and transparent capital market that facilitates the capital formation so important to our nation’s economy.
The SEC is concerned primarily with promoting the disclosure of important market-related information, maintaining fair dealing, and protecting against fraud, by overseeing the key participants in the securities world, including securities exchanges, securities brokers and dealers, investment advisors, and mutual funds.
In order for the SEC to be effective in each of these areas is to enforce its authority. Hundreds of civil enforcement actions against individuals and companies for violation of the securities laws are brought on each year by the SEC. Some typical infractions include insider trading, accounting fraud, and providing false or misleading information about securities and the companies that issue them.
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