What is the main function of the Securities and Exchange Commission?

Disable ads (and more) with a membership for a one time $4.99 payment

Study for the Texas Aandamp;M University (TAMU) ACCT229 Exam. Get exam-ready with flashcards, detailed explanations, and multiple choice questions. Enhance your understanding and boost your confidence!

The main function of the Securities and Exchange Commission (SEC) is to enforce laws regarding financial disclosures. This is crucial because the SEC was established to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation. It requires publicly traded companies to provide accurate financial information and disclosures to ensure transparency. This helps investors make informed decisions based on reliable information about a company's financial health.

The requirement for companies to disclose their financial performance and other material information helps to prevent fraud and abuse in the securities market, ultimately fostering investor confidence and maintaining the integrity of the financial system. By holding companies accountable for their financial reporting, the SEC plays a vital role in the broader economic landscape. This enforcement of disclosure laws distinguishes the SEC's function as regulatory and protective within the securities industry.