Glossary
Securities and Exchange Commission (SEC)
The US federal agency that regulates securities markets, enforces disclosure and anti-fraud laws, and oversees exchanges, brokers and funds.
The Securities and Exchange Commission (SEC) is the independent US federal agency responsible for regulating the securities markets. Its stated mission is to protect investors, maintain fair, orderly and efficient markets, and facilitate capital formation. Congress created it in the Securities Exchange Act of 1934, after the 1929 crash, and almost every part of investing in the US, from what a company must disclose to how your broker handles your order, runs through rules it writes or approves.
How it works
The SEC is led by five commissioners appointed by the President and confirmed by the Senate, with no more than three from the same political party; one serves as chair. Its staff work in divisions that each cover an area:
- Corporation Finance reviews company filings such as registration statements and annual reports.
- Trading and Markets oversees exchanges, broker-dealers and clearing agencies.
- Investment Management regulates mutual funds, ETFs and investment advisers.
- Enforcement investigates and brings civil cases for violations such as fraud and Insider trading. Criminal cases go to the Justice Department.
The SEC does not judge whether an investment is good; it requires that the facts be disclosed. Public companies file reports such as the Form 10-K, Form 10-Q and Form 8-K, all searchable for free on its EDGAR database.
How it relates to FINRA and the exchanges
Much day-to-day oversight is delegated to self-regulatory organizations. FINRA supervises broker-dealers, and exchanges police their own members, but their rules need SEC approval. The FINRA day-trading margin overhaul that took effect in June 2026, for example, was approved by the SEC that April.