1. 1

2. 2

3. GROUP A
 Moin Ali Baig (GL) 328
 Badar Munir 331
 Kamran Bangash 308
 Nadeem Arif 332
3

4. TOPIC
 What is SEC ?
 Introduction to SEC
 Objective & purpose
 Devisions
 Rules & Regulations
4

5. WHAT IS SEC ?
The Securities and Exchange
Commission
Investor protection is intended to enhance
investors’ confidence in the capital
markets. Confidence in any capital
market, is perhaps the single most
important requirement for its sustenance
and growth.
It is in this context that the SEC plays a
vital role.
5

6. BACKGROUND OF SECURITIES
REGULATION
Modern securities regulation started
from the United States of America
(US) in 1933.
The 1920s in the US, when there was
the absence of the full disclosure
principles, were a time of fraudulent
market practices, contributing to the
market crash of 1929.
6

7. BACKGROUND OF SECURITIES
REGULATION
In 1934 the US government passed the
Securities Exchange Act of 1934
which established the Securities and
Exchange Commission (SEC), U.S.A
The Act also provides for civil and
criminal penalties for fraud or
misrepresentation.
7

8. BACKGROUND OF SECURITIES
REGULATION
It also empowers SEC to register and
regulate securities exchanges, over
the counter trading, security brokers,
and security dealers.
8

9. BACKGROUND OF SECURITIES
REGULATION
Since the beginning of market
regulation in the US, many countries
have embraced the concept and have
established institutions charged with
capital markets regulation as SECP in
PAKISTAN.
9

10. OBJECTIVES OF SEC
The are three core objectives of
securities regulation:
Investor protection
Ensuring that market are fair
efficient and transparent
The reduction of risk.
10

11. Investor Protection
Protection against misleading,
manipulative or fraudulent practices,
including insider trading, and the
misuse of client assets
Full disclosure of information which is
material to investors’ decisions .
Only duly licensed or authorized
persons should be permitted to hold
themselves out to the public as market
operators
Supervision of market participants 11

12. Ensuring that markets are fair, efficient
and transparent
The regulator’s approval of exchange and trading
system operators and of trading rules helps to
ensure fair markets.
Dissemination of relevant information is timely
and widespread and is reflected in the price
formation process
Information about trading in the market is made
publicly available on a real-time basis
12

13. The reduction of systemic risk
Reduce the risk of failure (through
measures including capital and internal
control requirements)
Respond to market disruptions through
facilitation of stable domestic and global
cooperation and information sharing.
Ensure that capital and other prudential
requirements are sufficient to address
appropriate risk taking.
13

14. RESPONSIBILITY OF THE
COMMISSION
 Interpret federal securities laws;
 Issue new rules and amend existing
rules;
 Oversee the inspection of securities
firms, brokers, investment advisers, and
ratings agencies;
 Oversee private regulatory organizations
in the securities, accounting, and
auditing fields; and
 Coordinate securities regulation with
federal, state, and foreign authorities.
14

15. Divisions
 Division of Corporation Finance
 Division of Trading and Markets
 Division of Investment Management
 Division of Enforcement
 Division of Risk, Strategy, and
Financial Innovation
15

16. Division of Corporation
Finance
The Division of Corporation Finance
seeks to ensure that investors are
provided with material information in
order to make informed investment
decisions, both when a company
initially offers its securities to the
public and on an ongoing basis as it
continues to give information to the
marketplace.
16

17. Division of Corporation
Finance
The Division of Corporation Finance
reviews documents that publicly-held
companies are required to file with the
Commission. The documents include:
 Registration statements for newly-
offered securities;
 Annual and quarterly filings
17

18. Division of Corporation
Finance
 Proxy materials sent to shareholders
before an annual meeting;
 Annual reports to shareholders;
 Documents concerning tender offers
(a tender offer is an offer to buy a
large number of shares of a
corporation, usually at a premium
above the current market price) and
 Filings related to mergers and
acquisitions. 18

19. Division of Trading and
Markets
The Division regulates the major
securities market participants,
including broker-dealers, self-
regulatory organizations (such as
stock exchanges and clearing
agencies),
The Division of Trading and Markets
assists the Commission in executing
its responsibility for maintaining fair,
orderly, and efficient markets.
19

20. Division of Investment
Management
The Division of Investment
Management regulates investment
companies (such as mutual funds,
closed-end funds, UITs, ETFs, and
interval funds), including variable
insurance products, and federally
registered investment advisers.

21. Division of Enforcement
The Division of Enforcement
investigates possible violations of
securities laws, recommends
Commission action when appropriate,
either in a federal court or before an
administrative law judge, and
negotiates settlements.
21

22. Division of Enforcement
Common conduct that may lead to SEC
investigations include:
 Misrepresentation or omission of
important information
 Manipulating the market prices of
securities;
 Stealing customers' funds or securities;
 Violating broker-dealers' responsibility to
treat customers fairly;
 Insider trading and
 Selling unregistered securities.
22

23. Division of Risk, Strategy, and
Financial Innovation
The Division's responsibilities cover
three broad areas:
 Risk and economic analysis
 Strategic research
 Financial innovation
23

24. RULES & REGULATIONS
 The securities act of 1933
 The securities act of 1934
 SEC
 The Maloney act of 1936
 NASDAQ
 NASD
24

25. RULES & REGULATIONS
 The investment company act of 1940
 The investment advisor act of 1940
 The security investor protection
act1970
 SPIC
25

26. RULES & REGULATIONS
 The securities act of amendments
1975
 Circuit breakers & trading curbs
26

27. 27