Securities Act of 1934 - Essay Example

SECURITIES ACT OF 1934 While on the market, securities and issuers are regulated by the Securities Exchange Act of 1934. The regulation incorporates; brokers, securities sales, exchanges, and dealers. In accordance to the act, financial information that pertains to some corporations should be disclosed publicly. The SEC reaches its objective through insider trading and short-swing profits. Inside information is accessed by directors, officers, and more than 10% of shareholders. Through Section 16 of the act, the individuals who have access to inside information have to declare their holdings by filing reports.

Moreover, these individuals have to submit the short-swing profits to the corporation. Also, SEC offers a one-time registration of all the securities that wish to trade on the national stock exchange. The registration incorporates companies with 2000 shareholders or 500 unaccredited investors. Moreover, the company’s assets should amount to $10 million. Through regulating voting information calls for full exposure as an objective of the proxy solicitation. Here, representing the interests of shareholders and earlier filling is priority.

The proxy statement should be detailed with the soliciting information. The 1934 Act antifraud provision entails regulating the propriety of sales within the marketplace. The specific sections of the antifraud act are Section 10(b) and Rule 10b-5. Here, it is stated that withholding of information interferes with the free market, and it is committing fraud through violating Section 10(b). Lastly, SEC objective calls for periodic filing under the 1934 Act. Companies have to file a quarter and annual financial reports known as 10-Q and 10-K respectively.

Furthermore, on the 8-K report, unusual events such as takeover, changes in company control, spin-offs and bankruptcies are reported. Reference The Securities Exchange Act of 1934. Business management and Governance.