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GROUP A

Moin Ali Baig (GL) 328

Badar Munir 331Kamran Bangash

308 Nadeem Arif 332

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TOPIC

What is SEC ?Introduction to SECObjective & purposeDevisions Rules & Regulations

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WHAT IS SEC ?

The Securities and Exchange Commission

Investor protection is intended to enhance investors’ confidence in the capital markets. Confidence in any capital market, is perhaps the single most important requirement for its sustenance and growth.

It is in this context that the SEC plays a vital role.

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BACKGROUND OF SECURITIES REGULATION

Modern securities regulation started from the United States of America (US) in 1933.

The 1920s in the US, when there was the absence of the full disclosure principles, were a time of fraudulent market practices, contributing to the market crash of 1929.

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BACKGROUND OF SECURITIES REGULATION

In 1934 the US government passed the Securities Exchange Act of 1934 which established the Securities and Exchange Commission (SEC), U.S.A

The Act also provides for civil and criminal penalties for fraud or misrepresentation.

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BACKGROUND OF SECURITIES REGULATION

It also empowers SEC to register and regulate securities exchanges, over the counter trading, security brokers, and security dealers.

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BACKGROUND OF SECURITIES REGULATION

Since the beginning of market regulation in the US, many countries have embraced the concept and have established institutions charged with capital markets regulation as SECP in PAKISTAN.  

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OBJECTIVES OF SEC

The are three core objectives of securities regulation:Investor protectionEnsuring that market are fair efficient and transparent

The reduction of risk.

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Investor ProtectionProtection against misleading, manipulative or fraudulent practices, including insider trading, and the misuse of client assets

Full disclosure of information which is material to investors’ decisions .

Only duly licensed or authorized persons should be permitted to hold themselves out to the public as market operators

Supervision of market participants

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Ensuring that markets are fair, efficient and transparentThe regulator’s approval of exchange and

trading system operators and of trading rules helps to ensure fair markets.

Dissemination of relevant information is timely and widespread and is reflected in the price formation process

Information about trading in the market is made publicly available on a real-time basis

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The reduction of systemic riskReduce the risk of failure (through

measures including capital and internal control requirements)

Respond to market disruptions through facilitation of stable domestic and global cooperation and information sharing.

Ensure that capital and other prudential requirements are sufficient to address appropriate risk taking.

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RESPONSIBILITY OF THE COMMISSION

Interpret federal securities laws;Issue new rules and amend existing rules; Oversee the inspection of securities firms,

brokers, investment advisers, and ratings agencies;

Oversee private regulatory organizations in the securities, accounting, and auditing fields; and 

Coordinate securities regulation with federal, state, and foreign authorities.

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DivisionsDivision of Corporation

FinanceDivision of Trading and

MarketsDivision of Investment

ManagementDivision of EnforcementDivision of Risk, Strategy,

and Financial Innovation

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Division of Corporation Finance

The Division of Corporation Finance seeks to ensure that investors are provided with material information in order to make informed investment decisions, both when a company initially offers its securities to the public and on an ongoing basis as it continues to give information to the marketplace.

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Division of Corporation Finance

The Division of Corporation Finance reviews documents that publicly-held companies are required to file with the Commission. The documents include:

Registration statements for newly-offered securities;

Annual and quarterly filings

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Division of Corporation Finance

Proxy materials sent to shareholders before an annual meeting;

Annual reports to shareholders; Documents concerning tender offers

(a tender offer is an offer to buy a large number of shares of a corporation, usually at a premium above the current market price) and

Filings related to mergers and acquisitions.

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Division of Trading and Markets

The Division regulates the major securities market participants, including broker-dealers, self-regulatory organizations (such as stock exchanges and clearing agencies),

The Division of Trading and Markets assists the Commission in executing its responsibility for maintaining fair, orderly, and efficient markets.

Division of Investment Management

The Division of Investment Management regulates investment companies (such as mutual funds, closed-end funds, UITs, ETFs, and interval funds), including variable insurance products, and federally registered investment advisers.

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Division of Enforcement

The Division of Enforcement investigates possible violations of securities laws, recommends Commission action when appropriate, either in a federal court or before an administrative law judge, and negotiates settlements.

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Division of Enforcement

Common conduct that may lead to SEC investigations include:

Misrepresentation or omission of important information  

Manipulating the market prices of securities;  

Stealing customers' funds or securities;  Violating broker-dealers' responsibility to

treat customers fairly; Insider trading and  Selling unregistered securities.

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Division of Risk, Strategy, and Financial Innovation

The Division's responsibilities cover three broad areas:

Risk and economic analysisStrategic researchFinancial innovation

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RULES & REGULATIONS

The securities act of 1933The securities act of 1934SECThe Maloney act of 1936NASDAQNASD

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RULES & REGULATIONS

The investment company act of 1940

The investment advisor act of 1940

The security investor protection act1970

SPIC

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RULES & REGULATIONS

The securities act of amendments 1975

Circuit breakers & trading curbs

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