What Is the Securities Exchange Act of 1934?
The Securities Exchange Act of 1934 is both a piece of American business legislation and a series of clarifications and fixes to the Securities Exchange Act of 1933. The updated act contained two main points; it regulated secondary trading of securities, and it founded the Securities Exchange Commission (SEC). These acts were both created is hopes of preventing another stock market crash like the one that triggered the Great Depression. A security is usually a stock, bond or debt note. These securities are issued to allow companies to make money or mitigate debt. There are two main methods for securities exchange; the primary and the secondary market. In the primary market, the issuer sells the securities. In the secondary market, the securities are traded between parties that are unconnected to the issuer. The Securities Exchange Act of 1934 was created to regulate these secondary trades.
