Massachusetts Life Producer Practice Exam

Which Federal Agency is responsible for enforcing Security laws passed by Congress?

1. Federal Trade Commission

2. Securities and Exchange Commission

3. Federal Bureau of Investigation

4. Commodity Futures Trading Commission

The correct answer is: Securities and Exchange Commission

The Securities and Exchange Commission (SEC) is the federal agency primarily responsible for enforcing federal securities laws passed by Congress. This includes overseeing the securities markets and protecting investors, maintaining fair and efficient markets, and facilitating capital formation. The SEC ensures compliance with securities regulations and plays a vital role in regulating the securities industry, which encompasses stock exchanges, brokerage firms, and investment advisors. The SEC's regulatory framework is fundamental to maintaining trust in the financial system, as it helps prevent fraud and abuses in the securities markets. By enforcing laws such as the Securities Act of 1933 and the Securities Exchange Act of 1934, the SEC plays a key role in ensuring that companies provide full and fair disclosure to investors, thereby promoting transparency and integrity in the financial markets. Other agencies have distinct roles: the Federal Trade Commission oversees consumer protection and competition laws; the Federal Bureau of Investigation focuses on national security and law enforcement; and the Commodity Futures Trading Commission regulates the commodity futures and options markets. Each agency has its own mission, but the SEC specifically targets issues related to securities and investment.