Securities Trader Representative (Series 57) 2025 – 400 Free Practice Questions to Pass the Exam

Question: 1 / 400

What is the primary purpose of the Securities Exchange Act of 1934?

To promote initial public offerings of securities

To regulate the secondary trading of securities and to protect investors

The primary purpose of the Securities Exchange Act of 1934 is to regulate the secondary trading of securities and to protect investors. This act was established to ensure fair trading practices and prevent fraud in the securities markets. It provides the framework for the regulation of securities exchanges, broker-dealers, and various other market participants.

The act requires companies to disclose financial information regularly, which helps maintain transparency in the marketplace and provides investors with critical information needed to make informed decisions. It also established the Securities and Exchange Commission (SEC), which oversees securities markets and enforces securities laws to protect investors and foster confidence in the markets.

This focus on regulating secondary market transactions distinguishes the act from aspects such as promoting initial public offerings or setting interest rates, which fall under different regulatory or market functions. While corporate governance is important, it is also more aligned with different legal frameworks and regulations outside the direct purpose of the 1934 Act.

Get further explanation with Examzify DeepDiveBeta

To set interest rates for securities markets

To establish rules for corporate governance

Next Question

Report this question

Subscribe

Get the latest from Examzify

You can unsubscribe at any time. Read our privacy policy