Functions of Security Exchange Commission (SEC) - QS Study
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Functions of Security Exchange Commission (SEC)

The organization that oversees accounting practices is called the Securities Exchange Commission, which is also known as the SEC. The functions of Security Exchange Commission are control and development of capital market. It performs a variety of activities so that the capital market can run efficiently. It protects the investor’s interest as well as the companies. The prominent functions of SEC are given below:

Regulation and control: SEC is the regulatory authority of stock exchange. It controls the activities of the capital market.

Listing and controlling: Listing of the parties involved in share market such as brokers, share transfer agents, bankers, manager to the issues, underwriters, portfolio managers, investors, and other intermediaries persons or organizations and controlling of these parties is another important function of Securities and Exchange Commission.

Registration: SEC registers the mutual funds, companies, joint investors. SEC monitors their activities and controls these organizations.

Controlling autonomous organization: Securities and Exchange Commission controls the autonomous organizations by monitoring their activities. That is involved in transactions on the stock exchange.

Preventing forgery: SEC takes necessary steps to prevent forgery and unlawful transaction. It takes actions also to prosecute the guilty ones.

Preventing inside trade: Inside trade is one of the ways to gain from companies by the management and for these general shareholders are deprived of accurate profit. So, SEC prevents the inside trading so that the interest of investors is sustained.

Investigation and audit: SEC investigates the organization involved in the stock exchange. It also checks and audits the accounts of that organization.

Training: SEC conducts various training for the parties particularly for the intermediaries so that they could do their business efficiently and effectively.

Disseminating information: SEC discloses necessary information to the general mass about the issuer companies so that the general investors could be aware of the ultimate financial condition of those companies.

Publication and research: SEC conducts much research on the ways developing capital market. It examines the performance of the listed organization. SEC also conduct research the potential sectors. Based on such research and the information, SEC publishes many journals, research books etc. to inform the people about the findings.

Reporting and indenting: SEC makes a regular index of transactions of stock exchanges. It discloses different information to analyze the market for the awareness of the people.

Permitting share issue: SEC is the authority without whose permission a share can be issued. SEC permits to issue share by checking the necessary documents and analyzing the potentiality of registered Companies.

Controlling speculation: Speculators are responsible for unrest situation of the share price. They influence the share price by them cleverly. SEC prevents this bad culture because the general investors would not have the true benefits due to the speculators.

These are the vital functions of SEC through which it works for the efficient running of the capital market and development of capital market thus strengthening the economic base of a country.