The Securities and Exchange Commission (SEC) is an independent agency of the United States federal government. The commission holds primary responsibility for enforcing the federal securities laws, proposing securities rules, and regulating the securities industry. This encompasses the nation’s stock and options exchanges, and other activities and organizations, including the electronic securities markets in the U.S. It was created by Congress in 1934 as the first federal regulator of the securities markets.
Financial services firms such as broker-dealers, advisory firms and asset managers, along with their professional representatives must also register with the SEC to conduct business. The commission would also be responsible for approving any formal cryptocurrency exchange. The SEC does NOT rule upon the validity of proposed mergers and acquisitions. This is decided by national competition regulators.
SEC Purpose
The Securities and Exchange Commission describes its purpose as
The mission of the SEC is to protect investors; maintain fair, orderly, and efficient markets; and facilitate capital formation. The SEC strives to promote a market environment that is worthy of the public’s trust.
and goes on to say,
The SEC oversees the key participants in the securities world, including securities exchanges, securities brokers and dealers, investment advisors, and mutual funds. Here the SEC is concerned primarily with promoting the disclosure of important market-related information, maintaining fair dealing, and protecting against fraud.
The Securities and Exchange Commission is an important source of information for merger arbitrage trading. Merger Arbitrage Limited provides many links to this information throughout the site. Important documents and press statements are often featured on our deal factsheet pages. For example, the 8-K filing regarding The Habit Restaurants (HABT) merger. In addition, MAL has also produced guides showing how to understand and read SEC filings and specifically a Form 8-K. It is imperitive traders and investors understand the importance of these filings and how to interpret them accordingly.
