Definition of securities exchange act of 1934

law governing the securities markets, enacted June 6, 1934. The act outlaws misrepresentation, manipulation, and other abusive practices in the issuance of securities. It created the Securities And Exchange Commission (SEC) to enforce both the securities act of 1933 and the Securities Exchange Act of 1934.

law governing the securities markets, enacted June 6, 1934. The act outlaws misrepresentation, manipulation, and other abusive practices in the issuance of securities. It created the Securities and Exchange Commission (SEC) to enforce both the securities act of 1933 and the Securities Exchange Act of 1934.

Principal requirements of the 1934 act are as follows:

1. registration of all securities listed on stock exchanges, and periodic disclosures by issuers of financial status and changes in condition.
2. regular disclosures of holdings and transactions of " insiders" -the officers and directors of a corporation and those who control at least 10% of equity securities.
3. solicitation of proxies enabling shareholders to vote for or against policy proposals.
4. registration with the SEC of stock exchanges and brokers and dealers to ensure their adherence to SEC rules through self-regulation.
5. surveillance by the SEC of trading practices on stock exchanges and over-the-counter markets to minimize the possibility of insolvency among brokers and dealers.
6. regulation of margin requirements for securities purchased on credit; the Federal Reserve Board sets those requirements.
7. SEC subpoena power in investigations of possible violations and in enforcement actions.
   The securities acts amendments of 1975 ratified the system of free-market determination of brokers' commissions and gave the SEC authority to oversee development of a National Market System .