1.1 Regulatory Entities, Agencies and Market Participants

mission

(1) protect investors (2) maintain fair, orderly, and efficient markets and (3) facilitate capital formation. These three statements make up the SEC's ____________.

Self-Regulatory Organization (SRO)

A non-governmental organization that has the power to create and enforce industry regulations and standards. The priority is to protect investors through the establishment of rules that promote ethics and equality. Some examples of these organizations include stock exchanges, the Investment Dealers Association of Canada, and the National Association of Securities Dealers in the United States.

The Securities and Exchange Commission (SEC)

An independent agency of the U.S. federal government. Its primary responsibility is to enforce the federal securities laws, propose securities rules, and regulate the securities industry, the nation's stock and options exchanges, and other activities and organizations, including the electronic securities markets in the United States.

three

By law no more than how many SEC commissioners may belong to the same political party?

responsibility

In keeping with its mission, the SEC has the ____________ to: - interpret and enforce federal securities laws; - issue new rules and amend existing rules; - oversee the inspection of securities firms, - brokers, investment advisers, and ratings agencies; - oversee independent and self regulatory organizations in the securities, accounting, and auditing fields; - coordinate U.S. securities regulation with federal, state, and foreign authorities

Financial Industry Regulatory Authority (FINRA)

SRO that regulates trading in equities, corporate bonds, securities futures, and options. All firms dealing in securities that are not regulated by another SRO are required to be a member of this SRO

The President

The Chairman of the SEC, who acts as the agency's executive, is appointed by who?

five

The SEC consists of how many presidentially-appointed Commissioners, with staggered terms.

eleven

The SEC has ________ Regional offices throughout the country.

Divisions

The SEC's organizational structure consists of five ____________ and 23 Offices headquartered in Washington, D.C.

Division of Enforcement

The division of the SEC that investigates and prosecutes violations of the Federal securities laws and regulations. In addition, it coordinates with the Department of Justice and other authorities that may bring criminal cases when appropriate.

Division of Trading and Markets

The division within the SEC that establishes and maintains standards for fair, orderly, and efficient markets. This division regulates the major securities market participants, including broker-dealers, self-regulatory organizations (SROs), and transfer agents

Division of Investment Management

The division within the SEC that is responsible for overseeing investment funds, professional fund managers, securities research analysts and investment advisors.

Division of Corporation Finance

The division within the SEC that seeks to ensure that investors are provided with material information about a company's financial condition and business operations so that they can make informed investment decisions. This division evaluates whether public companies have fulfilled their disclosure obligations and seeks to improve the quality of the disclosure. They also provide interpretive assistance to companies with respect to SEC rules and forms, and makes recommendations regarding new rules and revisions to existing rules

True

True or False: The SEC has authority to bring civil charges in federal court or in administrative proceedings before an administrative law judge.