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Government Regulatory Agencies

This section contains the regulatory agencies in North America, and explains how the state laws are involved with regulating stocks.

 

PCAOB – The PCAOB is a private-sector, nonprofit corporation created by the Sarbanes-Oxley Act of 2002 to oversee the auditors of public companies in order to protect investors and the public interest by promoting informative, fair, and independent audit reports.

The Act required that auditors of U.S. public companies be subject to external and independent oversight for the first time in history. Previously, the profession was self-regulated.

• http://pcaobus.org/Pages/default.aspx


• Professional Standards: http://pcaobus.org/Rules/PCAOBRules/Pages/Section_3.aspx

 

 

FINRA – The Financial Industry Regulatory Authority (FINRA) is the largest independent regulator for all securities firms doing business in the United States. All told, FINRA oversees nearly 4,700 brokerage firms, about 167,000 branch offices and approximately 635,000 registered securities representatives.

Created in July 2007 through the consolidation of NASD and the member regulation, enforcement and arbitration functions of the New York Stock Exchange, FINRA is dedicated to investor protection and market integrity through effective and efficient regulation and complementary compliance and technology-based services.

FINRA touches virtually every aspect of the securities business—from registering and educating industry participants to examining securities firms; writing rules; enforcing those rules and the federal securities laws; informing and educating the investing public; providing trade reporting and other industry utilities; and administering the largest dispute resolution forum for investors and registered firms. It also performs market regulation under contract for The NASDAQ Stock Market, the American Stock Exchange, the International Securities Exchange and the Chicago Climate Exchange.

FINRA has approximately 2,800 employees and operates from Washington, DC, and New York, NY, with 15 District Offices around the country.

• http://www.finra.org/

 

SEC – The mission of the U.S. Securities and Exchange Commission is to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation.

The SEC oversees the key participants in the securities world, including securities exchanges, securities brokers and dealers, investment advisors, and mutual funds. Here the SEC is concerned primarily with promoting the disclosure of important market-related information, maintaining fair dealing, and protecting against fraud.

• http://www.sec.gov/


• Regarding the disclosure of important information, use EDGAR to look for public company filings such as 8K, 10Q, 10K, 314, and 14C to name a few.
  
  
  
  • http://www.sec.gov/edgar/searchedgar/webusers.htm
  
  
  
  


• To get a listing and explanation of the forms (such as 8K, 10Q, etc):
  
  
  
  • http://www.sec.gov/info/edgar/forms/edgform.pdf
  
  
  
  

Blue Sky Law – While the SEC directly, and through its oversight of the NASD and the various Exchanges, is the main enforcer of the nation’s securities laws, each individual state has its own securities laws and rules. These state rules are known as “Blue Sky Laws”.

While these laws vary from state to state, the laws require registration of securities offerings, and registration of brokers and brokerage firms. Each state has a regulatory agency which administers the law, typically known as the state Securities Commissioner. A list of state securities commissioners, and their addresses, is available in our Guide to State Securities Regulators.

While anti-fraud regulations are most commonly enforced by the SEC and the various SROs, the states also have the power and authority to bring actions against securities violators pursuant to state law. Each state has its own securities act, known colloquially as the “blue sky law”, which regulates both the offer and sale of securities as well as the registration and reporting requirements for broker-dealers and individual stock brokers doing business (both directly and indirectly) in the state, as well as investment advisers seeking to offer their investment advisory services in the state.

Recently, federal legislation was enacted which limited the ability of the states to review, limit or otherwise restrict the sale of most securities. The legislation was designed to eliminate the duplicitative nature of the federal and state securities laws. Today, in most instances, the states authority to review registration of securities offerings that are offered on a national basis have been severely restricted. However, there are notice and filing requirements in each state, which must still be complied with. Additionally, the legislation did not affect the ability of the state regulators to conduct investigations and to bring fraud actions.

• http://www.seclaw.com/bluesky.htm

 

Ontario Securities Commission – The Ontario Securities Commission (OSC) is the regulatory body responsible for regulating the province’s capital markets, according to a mandate established in the Securities Act (Ontario) and the Commodity Futures Act (Ontario). The Commission is a self-funded Crown corporation, accountable to the Legislature through the Minister of Finance.

We administer and enforce securities legislation in the Province of Ontario. Our mandate is to:

• Provide protection to investors from unfair, improper and fraudulent practices; and


• Foster fair and efficient capital markets and confidence in capital markets
  
  
  
  • http://www.osc.gov.on.ca/
  
  
  
  

 

Alberta Securities Commission – The Alberta Securities Commission (ASC) is the regulatory agency responsible for administering the province’s securities laws. It is entrusted to foster a fair and efficient capital market in Alberta and to protect investors. As a member of the Canadian Securities Administrators, the ASC works to improve, coordinate and harmonize the regulation of Canada’s capital markets.

This legislation is designed to ensure that Alberta’s capital market operates fairly and efficiently for participants, and that investors have timely, accurate information on which to base investment decisions. It also ensures that those who sell securities in Alberta are registered and that they conduct themselves according to applicable laws and professional standards.

• http://www.albertasecurities.com/Pages/Default.aspx

  

 

British Columbia Securities Commission – The British Columbia Securities Commission (BCSC) is the independent provincial government agency responsible for regulating securities trading in British Columbia through the administration of the Securities Act. Their mission is to protect and promote the public interest by fostering:

• A securities market that is fair and warrants public confidence
• A dynamic and competitive securities industry that provides investment opportunities and access to capital
  • http://www.bcsc.bc.ca/