Overview of the SEC Summer 2006. What is the SEC? Securities and Exchange Commission The mission of the U.S. Securities and Exchange Commission is to.

Overview of the SEC

Summer 2006

What is the SEC?

• Securities and Exchange Commission• The mission of the U.S. Securities and

Exchange Commission is to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation.

• www.sec.gov

What Does the SEC do?

• The SEC oversees the key participants in the securities world, including securities exchanges, securities brokers and dealers, investment advisors, and mutual funds. The SEC is concerned primarily with promoting the disclosure of important market-related information, maintaining fair dealing, and protecting against fraud.

Securities Act of 1933

• Often referred to as the "truth in securities" law, the Securities Act of 1933 has two basic objectives:

• Require that investors receive financial and other significant information concerning securities being offered for public sale; and

• Prohibit deceit, misrepresentations, and other fraud in the sale of securities.

• The full text of this Act is available at: http://www.sec.gov/about/laws/sa33.pdf.

Purpose of Registration

• Disclosure of important financial information through the registration of securities. This information enables investors, not the government, to make informed judgments about whether to purchase a company's securities. While the SEC requires that the information provided be accurate, it does not guarantee it. Investors who purchase securities and suffer losses have important recovery rights if they can prove that there was incomplete or inaccurate disclosure of important information.

Registration Statements

• IPO’s• Mergers and Other Business Combinations• Small Businesses• Debt Offers• Employee Stock Offers• Form Types: S-1; S-2; S-3; S-4; S-8• Prospectuses

Exemptions from Registration

• Private offerings to a limited number of persons or institutions; PPM

• Offerings of limited size • Intrastate offerings• Securities of municipal, state, and federal

governments; Blue Sky

Securities Exchange Act of 1934

• The Act empowers the SEC with broad authority over all aspects of the securities industry. This includes the power to register, regulate, and oversee brokerage firms, transfer agents, and clearing agencies as well as the nation's securities self regulatory organizations (SROs).

• The full text of this Act can be read at: http://www.sec.gov/about/laws/sea34.pdf.

What is an SRO?

• Self Regulated Organization• The various stock exchanges, such as the

New York Stock Exchange, and American Stock Exchange are SROs. The National Association of Securities Dealers, which operates the NASDAQ system, is also an SRO.

1934 Act

• The Act also identifies and prohibits certain types of conduct in the markets and provides the Commission with disciplinary powers over regulated entities and persons associated with them.

• The Act also empowers the SEC to require periodic reporting of information by companies with publicly traded securities.

Reporting Forms

• Quarterly & Annual Reports,10Q, 10K; Annual Report to Shareholders

• Beneficial Ownership, Forms 3, 4, 5• 5% Ownership Schedules,13D 13G • Tender Offers• Special Events 8K• SEC link for all Forms:

http://www.sec.gov/about/forms/secforms.htm

Other SEC Laws

• Public Utility Holding Company Act of 1935 http://www.sec.gov/about/laws/puhca35.pdf 

• Trust Indenture Act of 1939 http://www.sec.gov/about/laws/tia39.pdf

• Investment Company Act of 1940 http://www.sec.gov/about/laws/ica40.pdf.

• Investment Advisers Act of 1940 http://www.sec.gov/about/laws/iaa40.pdf.

• Sarbanes-Oxley Act of 2002 http://www.sec.gov/about/laws/soa2002.pdf.

Information available

• Search the EDGAR database http://www.sec.gov/edgar/searchedgar/webusers.htm

• Company Financial information• Bylaws Corporate information• Officers & Directors information• Industry information• Major Events