The Securities and Exchange Commission - Assignment Example

The SEC was created in 1934 due to the lack of public confidence in the market after the market crash of 1929. The two laws that created the SEC are the Securities Act of 1933 and the Securities and Exchange Act of 1934. The role of the division of corporate finance is to ensure investors are provided with material information for decision-making purposes. The purpose of the division of trading and markets is to establish and maintain standards for fair, orderly, and efficient markets. The role of the enforcement division is to investigate possible violations of security laws.

The role of the division of investment management is to regulate investment companies.  An example of a law enforced by the SEC that raised investor confidence in the 21st century after a series of corporate scandals is the Sarbanes-Oxley Act of 2002. The work performed by the SEC enforcement division ensures corrupt companies face penalties for their actions. A fair, orderly, and efficient market mean that investors have access to a reliable marketplace that is able to handle all the consumer orders during trading hours.

The trading and markets division accomplishes this task by regulating the major securities market participants which include the brokers, dealers, transfer agents, and self-regulatory organizations. The superb electronic information system of the SEC is essential to run the market in a fair, orderly, and efficient manner. Capital formation occurs when the money saved by the government and the individuals of a society is transferred to the business sector. The SEC is an institution whose objective and mission is to promote capital formation .