Securities and Exchange Commission

What are the three steps of the Rulemaking Process outlined by the SEC?

1. Conceptual Release 2. Rule Proposal 3. Rule Adoption

In a concept release, the SEC does three things; what are they?

1. Issue a series of questions to the public 2. Seek public feedback 3. Decide which approach, if any, is appropriate

When did Congress pass the Securities Act and the Securities Exchange Act?

1933 and 1934, respectively

How long doe the SEC allow for review and comment during the Rule Proposal phase?

30 to 60 days

What happens during the final phase, Rule Adoption?

A final measure is adopted by vote of the full commission.

T/F: A concept release identifies a main approach to address the problem.

False. A concept release identifies different approaches to address the problem.

What did the Securities Act of 1933 and the Securities Exchange Act of 1934 provide to investors?

The Acts provided investors and the markets with more reliable information and clear rules of honest dealing.

Why were the Securities Act of 1933 and the Securities Exchange Act of 1934 designed?

The Acts were designed to restore investor confidence in the U.S. capital markets

What are the name of the SEC issued rules?

The Financial Reporting Releases (FRR).

The SEC has the authority to establish accounting standards, however, who do they defer this authority to?

The SEC has deferred to the Financial Accounting Standards Board (FASB) to generate U.S. Accounting Standards for publicly traded companies.

Who is the Securities Exchange Commission (SEC)?

The SEC is a governmental entity created to protect the interest of investors by ensuring full and adequate disclosure by publicly traded companies.

What happens during the rule proposal phase?

The SEC publishes a detailed formal rule proposal for public comment outlining specific objectives and methods for achieving them.

What does the Securities Act of 1933 regulate?

The Securities Act of 1933 contains accounting and disclosure requirements for the initial offering of stocks or bonds (IPO)

Which Act created the SEC?

The Securities Exchange Act of 1934

What does the Securities Exchange Act of 1934 regulate?

The Securities Exchange Act of 1934 created the Securities and Exchange Commission (SEC) and contains requirements for secondary market offerings.

If the Rule Adoption is approved, what happens?

If approved, the rule becomes part of the official rules that govern the securities industry.

What happens if the SEC disagrees with FASB's pronouncements?

If the SEC disagrees with the pronouncements of the FASB, it has the power to overrule them.

What is the SEC's main mission?

To protect investors; maintain fair, orderly, and efficient markets; and facilitate capital formation.

T/F: A concept release is issued describing the area of interest and the SEC's concerns.

True.

What is rulemaking?

Rulemaking is the process by which federal agencies implement legislation passed by Congress and signed into law by the President.

What happens during the Conceptual release phase?

The process usually begins with a rule proposal, or a request by the SEC for public input on which regulatory approach is appropriate.