SEC Overview – Assent Compliance
What Is the SEC?
The U.S. Securities and Exchange Commission (SEC) is a U.S. government agency, tasked with maintaining fair, orderly and efficient markets. Established by the Securities Exchange Act of 1934 in response to the financial crash of October 1929, the commission was formed to share reliable market information and provide clear rules for honest dealing in order to rebuild investor confidence in capital markets.
The primary functions of the SEC are to:
Inform and protect investors.
Facilitate capital information.
Enforce federal securities laws.
Regulate securities markets.
What Does the SEC Do?
The SEC is responsible for enforcing federal securities laws, including the Dodd-Frank Wall Street Reform and Consumer Protection Act, which is a comprehensive regulation of financial markets. The SEC is also charged with issuing and amending rules to further promote their mission of protecting investors.
Additionally, the SEC oversees private regulatory organizations in the securities, accounting and auditing fields, as well as the inspection of securities firms, brokers, investment advisers and ratings agencies. They also coordinate U.S. securities regulation with federal, state and foreign authorities.
What Is the SEC’s Role in Conflict Mineral Regulation?
In 2010, the Dodd-Frank Act was signed into law, enforced by the SEC. Section 1502 of the Dodd-Frank Act requires companies using conflict minerals in their products to report their use and disclose their sources. These companies are responsible for filing conflict mineral documentation, including the conflict mineral reporting template, to the SEC at regular intervals. Frequent reporting increases the transparency of mineral sourcing, mitigating the risk of unintentionally providing financial support to armed groups in the Democratic Republic of the Congo through conflict minerals.
Section 1502 of the Dodd Frank Act applies to all manufacturers (domestic and foreign) that produce articles requiring conflict minerals for functional components. Companies most impacted by the Dodd Frank Act include electronics, communications and industrial product manufacturers as well as those in the aerospace, automotive and jewelry industries.