Securities Exchange Act of 1934
The foundational U.S. law governing secondary securities markets and establishing the SEC.
What is Exchange Act?
The Securities Exchange Act of 1934 (Exchange Act) is the foundational U.S. law governing trading in securities after their initial issuance, i.e., in secondary markets. Enacted in response to the 1929 stock market collapse, it created the Securities and Exchange Commission (SEC) and mandated ongoing financial disclosure by public companies through periodic reports including Forms 10-K, 10-Q, and 8-K. The Exchange Act prohibits securities fraud and market manipulation, regulates broker-dealers, exchanges, and clearing agencies, and establishes the legal framework for insider trading enforcement through Section 10(b) and Rule 10b-5. It also governs tender offers, proxy solicitations, and short-swing profit reporting by corporate insiders under Section 16.
Example
Under the Securities Exchange Act, Apple Inc. is required to file a 10-K annual report within 60 days of its fiscal year end, quarterly 10-Q reports within 40 days, and current reports on Form 8-K within four business days of material events such as earnings releases, major acquisitions, or executive departures. These disclosures are filed with and accessible to the public through the SEC's EDGAR database.