Securities Regulation Part II: Securities Exchange Act of 1934 and International Securities Regulation

A year after the Securities Act of 1933 was enacted, Congress passed the Securities Exchange Act. Whereas the ’33 Act was designed to govern and protect investors when there was a first issuance of a security, the purpose of the ’34 Act was to regulate securities transactions on the secondary market. Inasmuch as these transactions occurred almost entirely on stock exchanges, the act provided for the registration of the exchanges under the auspices of the Securities and Exchange Commission (SEC) that was commenced by the act. Much of the actual regulation is conducted by self-regulatory organizations (SROs), such as the Financial Industry Regulatory Authority (FINRA) and securities’ exchanges.