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SEC stands for the United States Securities and Exchange Commission. The SEC is a federal commission that resulted from the the Securities Act of 1933 and the Securities Exchange Act of 1934 enacted by Congress after the great depression. The Trust Indenture Act of 1939, the Investment Company Act of 1940, Investment Advisers Act of 1940, and the Sarbanes-Oxley Act of 2002 also give the SEC the authority to govern the securities markets. The SEC implements those acts/laws by issuing rules (a.k.a. SEC rules) that must be followed by security market participants in order to be compliant. The main purpose of the SEC is to regulate the securities industry and protect investors against fraudulent investment related practices. To that end, the SEC carries out several functions. First, the SEC promotes transparency by requiring public companies to register with the SEC and disclose information relevant to potential investors. The SEC further requires any public company to provide information about its business, and risk associated with investing in their company. The SEC also monitors the Financial Accounting Standards Board (FASB) to promote accuracy in accounting reporting. All of this is handled by the SEC's division of corporate finance. Second, the SEC oversees many aspects of the investment world including securities exchanges, brokers, investment advisors, mutual funds, and rating agencies. This is handled by the SEC's division of trading and markets and the SEC's division of investment management. Third, the SEC is responsible for enforcing securities laws. The SEC prosecutes breaches to those laws. This is handled by the division of enforcement. The president of the United States is responsible for appointing five commissioners, one of which will be the chairman of the SEC, to carry out the mission of the SEC. Once appointed, those commissioners are in charge of the SEC on a staggered five-year term.

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