what is SEC (Securities and Exchange Commission)

The Securities and Exchange Commission (SEC) is a federal agency in the United States charged with regulating the country's securities industry. Here is an overview of its functions and authority:

1. **Regulatory Authority**: The SEC oversees various entities within the securities industry, including securities exchanges, securities brokers and dealers, investment advisors, and mutual funds. It aims to promote fair dealing, ensure the disclosure of important market information, and prevent fraud.
2. **Enforcement Powers**: The SEC enforces securities laws and regulations through civil actions in federal court and can make criminal referrals to the Department of Justice (DOJ). Penalties may include fines, imprisonment, and restitution. State and federal courts also punish severe misconduct and provide justice for victims.
3. **Whistleblower Program**: The SEC's Whistleblower Office, established under the Dodd-Frank Wall Street Reform and Consumer Protection Act, plays a significant role in the agency's enforcement efforts. It encourages individuals to come forward with information about securities law violations, which can lead to monetary awards for whistleblowers.
4. **Climate Disclosure Rule**: In 2024, the SEC implemented a climate disclosure rule aimed at enhancing and standardizing climate-related disclosures for investors. This aligns with international efforts through the International Organization of Securities Commissions (IOSCO) and demonstrates the SEC's commitment to addressing environmental, social, and governance (ESG) factors in financial markets.
5. **Advisory Committees**: The SEC has advisory committees that provide perspectives and advice to the Commissioners and staff. These committees contribute to the agency's decision-making process and help shape regulatory policies.

In conclusion, the SEC plays a crucial role in protecting investors, maintaining market integrity, and facilitating capital formation. Its enforcement powers, whistleblower program, and recent initiatives like the climate disclosure rule highlight its commitment to regulating the securities industry effectively.