What is the Securities Exchange Act of 1934?

The Securities Exchange Act of 1934 created the U.S. Securities and Exchange Commission (SEC) and authorized it to govern the secondary market trading of company securities in the U.S. Secondary trading is the buying or selling of company securities (stock) typically through brokers or dealers. Often shortened to the Exchange Act of 1934 or the ‘34 Act, this landmark legislation laid the foundation for the financial regulation of public companies listed on stock markets including the New York Stock Exchange, American Stock Exchange and Pacific Stock Exchange.

President Franklin D. Roosevelt first signed the Securities Act of 1933 and the subsequent Securities Exchange Act of 1934 into law in the aftermath of the Stock Market Crash of 1929. The Exchange Act of 1934 gives the SEC broad powers to enforce U.S. federal securities law, but also investigate potential violations such as insider trading, the sale of unregistered stocks, manipulation of market prices and disclosure of fraudulent financial information. The SEC’s consumer protection powers extend to the organizations and individuals participating in the securities markets which would include securities exchanges, brokers and dealers, investment advisors and investment funds. By law, and with SEC oversight, consumers and investors have access to public company registration statements, periodic reports among other securities forms through the SEC’s EDGAR (Electronic Data Gathering, Analysis, and Retrieval) computer system for the receipt, acceptance, review and dissemination of documents submitted in electronic format to the Commission.

If a company has more than 500 shareholders and more than $10 million in assets, The Exchange Act of 1934 Act requires that it file annual company information with the SEC using SEC Form 10-K as well as quarterly with SEC Form 10-Q. If a company experiences a material event such as a change in leadership or structure, the SEC mandates the filing of SEC Form 8-K to disclose these changes. Forms 10-K, 10-Q, and 8-K must be filed via the SEC’s EDGAR online system. These periodic reports and annual statements are examined by the SEC to ensure that they are compliant with disclosure requirements and that the American public and investors can make informed decisions about their investment decisions.

The Exchange Act of 1934 also sets forth disclosure requirements in materials used to solicit shareholder votes in annual meetings held for approval of corporate action. The information is captured in proxy materials that must be filed with the SEC in advance of any solicitation. The SEC is charged with ensuring the company has provided all proper and accurate disclosures.

The Exchange Act of 1934 requires disclosure of important information by anyone seeking to acquire more than 5 percent of a company’s securities by direct purchase or tender offer as such an offer could impact control of the public company.

The SEC is limited to seeking civil penalties such as fines and injunctions, barring a person from future roles such as a corporate officer. Depending on the severity or significance of the offense, the Department of Justice can file criminal charges for alleged violations of The Exchange Act of 1934.
The largest SEC fine to date was levied on JP Morgan Chase for the selling of mortgage securities by illegal means, leading to the 2012 financial crisis. For support and additional information, explore our Corporate Compliance solutions.  

EXPLORE MORE

Annual Meeting and Proxy Solutions

Let our Annual Meeting & Proxy Efficiency Experts help you improve your process, add cutting-edge design features, enhance shareholder connectivity, and save you money.

Learn More
Capital Markets Transactions

Conducting due diligence and preparing regulatory filings when accessing the capital markets puts a huge strain on company resources. Learn how to efficiently execute debt, equity and M&A events.

See the Solution
Capital Markets Transactions

Conducting due diligence and preparing regulatory filings when accessing the capital markets puts a huge strain on company resources. Learn how to efficiently execute debt, equity and M&A events.

See the Solution
Equity, Debt, & IPO Offering Management Services

Explore Toppan Merrill's solutions for equity, debt and IPO offering management and hear from Toppan Merrill experts who can help you navigate the complexities of the IPO lifecycle.

See the Solution
Financial Services Marketing & Communications

Learn how to improve operational efficiency and productivity by streamlining and automating tasks for better enterprise content management and sales enablement.

See the Solution
Health Insurance Marketing & Communications

Explore Toppan Merrill's solutions for pre and post-enrollment member communications. Learn how our single-source-of-truth solution simplifies your omnichannel communications.

See the Solution
Health Insurance Marketing & Communications

Explore Toppan Merrill's solutions for pre and post-enrollment member communications. Learn how our single-source-of-truth solution simplifies your omnichannel communications.

See the Solution
Mandated Communications

Discover solutions to improve your health insurance mandated communications. Shorten review cycles, ensure consistency and maintain compliance with Toppan Merrill's leading-edge software.

See the Solution
Regulatory Disclosure for Corporations

Learn how to effectively and efficiently manage regulatory filings and shareholder communications with Toppan Merrill's solutions and subject matter expertise.

See the Solution
Automated SOX Compliance

Simplify your SOX compliance management process with Toppan Merrill's intuitive, collaborative, SaaS solution. Discover effective tools and processes to reduce risk.

See the Solution
ESEF Inline XBRL Mandate

Explore Toppan Merrill's end-to-end ESEF solution to help manage your filings so you have full confidence knowing that your iXBRL tagging is accurate.

See the Solution
Regulatory Disclosure for Investment Management Companies

Discover resources and solutions for the ever-changing requirements of regulatory compliance for companies compelled to comply with the 1940 Securities Act. Prepare and file with confidence.

See the Solution
Section 16 Filings

Streamline your Section 16 filings with one simple solution, SEC Connect.

Learn More
Insights and analysis: capital markets and regulatory compliance

Expand your expertise with valuable insights on capital market transactions and regulatory disclosures. Explore Toppan Merrill's blogs, articles, white papers and more.

Visit the blog
Insights & Analysis: Capital Markets & Regulatory Compliance

Expand your expertise with valuable insights on capital market transactions and regulatory disclosures. Explore Toppan Merrill's blogs, articles, whitepapers, and more.

Visit the Blog
Insights and Analysis: ESEF

Stay ahead of the ESEF requirements to ensure you are fully prepared for the mandate. Explore articles and compliance resources from our team of ESEF and iXBRL experts.

Visit the Blog
Insights & Analysis: Investment Management Company Compliance

Gain new and timely insights on investment management compliance. Explore articles, case studies, whitepapers and more.

Visit the Blog
Insights and Analysis: Health Insurance Marketing Communications

Gain new and valuable insights on health insurance marketing and communications. Explore Toppan Merrill's articles, blogs, case studies and other resources.

Visit the Blog