Question

The Federal Securities Act created which of the following in an effort to reform business and guard against another stock market crash?
A) The Agricultural Adjustment Administration
B) The Civilian Conservation Corps
C) The Federal Emergency Relief Administration
D) The Securities and Exchange Commission
E) The National Industrial Recovery Act

Answer 1

Hint: The Securities Act of 1933 was the first important piece of securities legislation. Prior to this act, state laws governed the majority of securities sales. By mandating firms to register with the Securities and Exchange Commission, the legislation addressed the demand for more disclosure (SEC).

Complete answer:
The Securities and Exchange Commission (SEC) of the United States is an independent federal government body tasked with safeguarding investors, ensuring the fair and orderly operation of securities markets, and enabling capital formation.

Following the stock market disaster of 1929, the Securities Act of 1933 was enacted to safeguard investors. The Act had two main objectives: to increase financial statement transparency so that investors may make educated investment decisions, and to establish regulations against deception and fraudulent activity in the securities markets.

The SEC's mission is divided into three parts: protecting investors, maintaining fair, orderly, and efficient markets, and facilitating capital formation.

The SEC enforces the legislative requirement that public firms and other regulated companies file quarterly and yearly reports, as well as other periodic reports, in order to fulfil its mandate.

Therefore the correct answer is option ‘D’.

Note: Several key takeaways of the “The Securities and Exchange Commission” are:
- Following the stock market disaster of 1929, the Securities Act of 1933 was enacted to safeguard investors.
- The Securities Act of 1933 was enacted to make corporate financial statements more transparent.
- Laws against deception and fraudulent conduct in the securities markets were also introduced under the Securities Act.