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

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.