Securities Exchange Act of 1934

• Date: May 16, 2011
• Source: http://www.sec.gov

Securities Act, the Exchange Act primarily regulates transactions of securities in the secondary market - that is, sales that take place after a security is initially offered by a company (the issuer).  These transactions often take place between parties other than the issuer, such as trades that retail investors execute through brokerage firms.  The Exchange Act operates somewhat differently from the Securities Act.  To protect investors, Congress crafted a mandatory disclosure process that is designed to force companies to make public information that investors would find pertinent to making investment decision.  In addition, the Exchange Act provides for direct regulation of the markets on which securities are sold (the securities (stock) exchanges) and the participants in those markets (industry associations, brokers, and issuers).

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