Disable ads (and more) with a membership for a one time $2.99 payment
Which of the following is true about the Securities Act of 1934?
It regulates primary market offerings
It deals with establishing the SEC
It informs investors about new securities
It was created to regulate mutual funds
The correct answer is: It deals with establishing the SEC
The Securities Act of 1934 primarily focuses on the regulation of the secondary market, the trading of securities after they have been issued. One of its significant contributions is the establishment of the Securities and Exchange Commission (SEC), which oversees and enforces federal securities laws in the United States. This act aimed to provide more transparency in the securities markets and protect investors from fraud after securities are offered and sold. While it might seem like the act deals with other areas as well, such as mutual funds or primary market offerings, those aspects are primarily addressed in different legislation, such as the Investment Company Act of 1940 or the Securities Act of 1933, which governs the primary market. Therefore, the statement about establishing the SEC accurately reflects a core function and purpose of the Securities Act of 1934.