How We Are Regulated By The SEC


We’re humbled by the trust our clients place in us and we do our best to honor that trust by treating them like family, getting to know their unique needs and goals, and working with them closely to get them to where they need to be. While we are guided by our professional values and business ethics, we’re also subject to regulation by a number of government entities and existing federal laws. So what form do these laws take, what sort of regulation are we subject to, and who is responsible for it?

Our primary regulatory agency is the Securities and Exchange Commission, more commonly referred to by the initialism SEC. The SEC is a largely independent agency of the federal government, with its leadership appointed by and answering to the President of the United States. The SEC fills a number of important roles, which are reflected in its internal organization. The divisions of the SEC are: 

  • The Division of Corporation Finance, which oversees publicly traded corporations. 
  • The Division of Trading and Markets, which safeguards fair and efficient trade markets.
  • The Division of Investment Management, which protects investors by overseeing and regulating the investment management industry and its players. 
  • The Division of Enforcement, which investigates securities law violations. 
  • The Division of Economic and Risk Analysis, which monitors changes in the economy and keeps markets efficient and fair 

Per its website, the SEC works to protect investors, facilitate capital formation, and maintain fair, orderly, and efficient markets. This is noble and important work, which ultimately protects us and our clients as we seek to find the best investment solutions. 

Established by the Securities Act of 1933 and the Securities Exchange Act of 1934, the SEC is part of Franklin Delano Roosevelt’s New Deal program. The New Deal was FDR’s response to the Great Depression, for which unregulated markets and investment were largely to blame. Following one of the longest bull markets in history, the Stock Market Crash of 1929–Black Tuesday in popular memory–the need for robust, nationwide regulation became clear. Prior to that time, markets were regulated by “blue sky laws”, which varied from state to state. The formation of the SEC and the evolution of its regulatory powers were meant to ensure that the rampant speculation and trading on margin that led to the Depression could never happen again. 

Currently, the SEC works closely with a number of federal agencies that all share similar goals. The major one is the Working Group on Financial Markets, established in 1988 by President Ronald Reagan with “the goals of enhancing the integrity, efficiency, orderliness, and competitiveness of our Nation’s financial markets and maintaining investor confidence.” Other components of the WGFM include The Secretary of the Treasury, who acts as chair of the Working Group, the Chairperson of the Board of Governors of the Federal Reserve System, and the Chairperson of the Securities and Exchange Commission, and the Chairperson of the Commodity Futures Trading Commission. Each member may appoint a designee to act in their stead should that prove necessary. 

The SEC continues to evolve, as the world, the markets, and investors continue to evolve themselves and face new needs and new challenges. The regulation and guidance offered by the SEC are vital to our nation’s economy and economic growth, filling a stabilizing role. The framework they provide allows us the tools we need to illuminate the blind spots in investing for all our clients.