The Securities Exchange Act of 1934
The Securities Act of 1933 regulates how securities are registered, issued, and distributed to the public for the first time. A new issue of securities is considered to be offered in the primary market. In contrast, the Securities Exchange Act of 1934 (also called the Exchange Act or the 1934 Act) regulates the reselling of securities—the secondary market.
For the Series 53, there are four major pieces of information that you need to know about the 1934 Act:
- • It contains important trading laws—including laws on insider trading.
- • It allows securities exchanges to regulate themselves (e.g., New York Stock Exchange)—under the condition that they register with the Securities and Exchange Commission (SEC) and devise a set of rules consistent with the Act’s specific guidelines.
- • It created the SEC to be the body primarily responsible for the creation and enforcement of securities laws.
- • It requires brokers and dealers to register with a registered national secu