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The SEC stands for the US Securities and Exchange Commission.

The U.S. Securities and Exchange Commission (SEC) is an independent federal government regulatory agency responsible for protecting investors, maintaining fair and orderly functioning of the securities markets, and facilitating capital formation.

Set up in 1934, the SEC’s mandate is to enforce US laws on the trading of securities (financial assets), maintain fair and efficient markets, ensure investors aren’t subject to abuse and help maintain a well-functioning economy.

The SEC was established by the passage of the U.S. Securities Act of 1933 and the Securities and Exchange Act of 1934, largely in response to the stock market crash of 1929 that led to the Great Depression.

To help support investor education, the SEC offers the public a wealth of educational information on their website, which also includes the EDGAR database of disclosure documents that public companies are required to file with the Commission.

Though it is the primary overseer and regulator of the U.S. securities markets, the SEC works closely with many other institutions, including Congress, other federal departments and agencies, the self-regulatory organizations (e.g. the stock exchanges), state securities regulators, and various private sector organizations.

In addition, the Chairman of the SEC represents the agency as a member of the Financial Stability Oversight Council (FSOC).

The SEC is made up of a five-person commission, with each member serving a five-year term.

The five commissioners are appointed by the president, one of whom is designated as chairman.

Each commissioner’s term lasts five years, but they may serve for an additional 18 months until a replacement is found.

To promote nonpartisanship, the law requires that no more than three of the five commissioners come from the same political party.