What is the primary role of the Securities and Exchange Commission (SEC)?

The primary role of the Securities and Exchange Commission (SEC) is to oversee U.S. financial markets and accounting standards. This agency was established to protect investors, maintain fair and efficient markets, and facilitate capital formation. The SEC enforces securities laws to prevent fraud, insider trading, and other unfair practices. It also requires public companies to disclose financial information, ensuring that investors can make informed decisions based on accurate and timely data.

By regulating the securities industry, the SEC plays a critical role in maintaining public confidence in the financial markets, which is essential for economic stability and growth. It oversees the work of accounting standards boards, such as the Financial Accounting Standards Board (FASB), which develops the principles that govern financial reporting and ensure transparency in financial statements. This central function supports the integrity of the financial system and protects the interests of both investors and the general public.