Certified Financial Services Auditor Practice Exam

The major goal of the Securities Exchange Act of 1934 is to protect investors from unfair trade practices. This legislation was enacted in the wake of the stock market crash of 1929 to restore investor confidence in the securities markets and to ensure fair trading practices. It established the Securities and Exchange Commission (SEC), which is responsible for enforcing the federal securities laws and regulating the securities industry, including the stock exchanges.

One of the primary purposes of the Act is to provide investors with the necessary information about securities being offered for sale and to promote transparency in the markets. By requiring public companies to disclose financial and other significant information, the Act aims to create a level playing field where all investors can make informed decisions. It also includes provisions to prevent practices such as insider trading and market manipulation, further safeguarding investors’ interests.

The focus on protecting investors ensures that they can have confidence in their investments, knowing that there are regulations in place to guard against malfeasance and unfair practices, thus enhancing the integrity of the overall market.