US Capital Markets

Regulating the Stock Trade

The Securities & Exchange Commission (SEC) is the American government body responsible for monitoring the stock market.  Following the 1929 crash, Congress came to the conclusion that the stock market needed to be regulated, and in 1934 the SEC was established. 

The SEC is a powerful force in the financial markets, and it uses a number of different tools to monitor trade and guarantee its operation.  American firms are required to report regularly to the SEC and to the public.  Some of these reports are filed at regular intervals, and others upon special business events, such as mergers, acquisitions, and management and director changes.

Table 12 displays the important reports that corporations need to supply the SEC.

Table 12

SEC Reports

Report Regularlty Details
Annual Report Form 10-K Annually This includes a detailed balance report, along with statements regarding profits and losses, and a description of the company's activities over the past year.
Quarterly Report Form 10-Q Quartely The compan's activities and their financial repercussions over the past quarter are listed here.
Proxy Statement Def-14A Annually, before the annual shareholders meeting. this report tells how many shares and options the company's managers hold and their salaries. In addition , it provides information on other major stockholders.

 

These reports and other forms that are supplied to the SEC are investors’ primary source of information.

There are a number of ways of receiving these reports:

  • From a broker or investment advisor.
  • Directly from the shareholder relations department of the company.
  • Directly from the SEC’s database on the Internet.  The name of the database is EDGAR and it can be found at www.sec.gov.

 

Regulating the Stock Trade599  Regulating the Stock Trade