The Securities and Exchange Commission (SEC) is the federal agency that oversees investment offerings and financial markets. It is responsible for regulating broker-dealers, investment advisors, exchanges, and public companies to ensure that investors have accurate and transparent information. It also regulates the sale of securities, including initial public offerings.
Congress created the SEC in 1934 in response to the Great Depression. As the first federal regulator of the securities markets, the SEC was tasked with regulating the bucket shops and unethical trading practices that had contributed to the stock market crash of 1929.
Securities offered in the U.S. must be registered with the SEC before being sold to investors. Financial services firms such as broker-dealers, advisory firms, asset managers, and their professional representatives must also register with the SEC to do business.