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What Is the Securities Exchange Act of 1934?

The Securities Exchange Act of 1934 was passed in order to govern the secondary trading of securities in the US. Secondary trading typically takes place through brokers or dealers. Also known as the Exchange Act or the ‘34 Act, this landmark legislation laid the foundation for the financial regulation of all companies listed on stock exchanges including the New York Stock Exchange, American Stock Exchange and Pacific Stock Exchange.

President Franklin D. Roosevelt signed the Securities Exchange Act of 1934 into law in the aftermath of the 1929 stock market crash. The ‘34 Act was also responsible for the creation of the Securities and Exchange Commission (SEC). The Exchange Act not only gives the SEC the ability to enforce US federal securities law, but also investigate potential violations such as insider trading, the sale of unregistered stocks, manipulation of market prices and disclosure of fraudulent financial information. 

The Maloney Act amended the Exchange Act in 1938 to allow for creation and registration of national securities associations to oversee the conduct of their members in accordance with the SEC. As a result, the National Association of Securities Dealers (NASD) was formed to supervise brokers and brokerage firms as well as the NASDAQ stock market. The NASD was later broken into two entities in 1996, one entity regulating brokers and firms and the other regulating the NASDAQ market.

If a company has more than 500 shareholders and $10 million-plus in assets, the 1934 Act requires that it regularly file company information with the SEC on an annual basis using Form 10-K as well as quarterly with Form 10-Q. If a company experiences a material event, the SEC mandates the filing of Form 8-K to disclose these changes.

Form 10-Ks, 10-Qs, and 8-Ks must be filed via the SEC’s EDGAR (Electronic Data Gathering, Analysis and Retrieval) system, where they are made publicly available on sec.gov. These statements are examined by the SEC to ensure that they are compliant with disclosure requirements.

How Can Merrill Help?

With nearly 50 years of global regulatory experience, and as one of the first companies to actively engage with the XBRL filing program, Merrill is uniquely qualified to help filers worldwide successfully navigate ever-changing global compliance requirements. With Merrill, you can manage regulatory disclosures with absolute security, precision and accuracy.

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