Question

The SEC also oversees __________________________________________, or private organizations that create and enforce industry standards. These organizations are allowed to “police” themselves, but are subject to compliance with SEC regulations. The various well-known securities exchanges such as the New York Stock Exchange (NYSE), the National Association of Securities Dealers Automated Quotation System (NASDAQ), and the Chicago Board of Options are SROs. Per Section 12(g), companies with total assets exceeding $10 million and with 500 or more owners of any class of securities must register with the SEC unless they meets exemption requirements.

self-regulatory organizations (SROs)

NASDAQ

Billion Dollar Corporations

non profits

The Securities Exchange Act of 1934 governs secondary markets, or what is typically referred to as the “stock market.” In contrast to the primary market, which involves the initial sale of a security, such as through an _______________________________________, secondary markets involve subsequent buyers and sellers of securities. One key difference is that primary market prices are set in advance, while secondary market prices are subject to constantly changing market valuations, as determined by supply and demand and investor expectations.

initial public offering (IPO)

intermediary

officer of the SEC

officer of NASDAQ

_____________________________________ required companies initiating securities offers and exchanges to register with the SEC, unless they met exemption criteria. Section 5 of the Securities Exchange Act of 1934 built upon this foundation and made it unlawful to transact on unregistered exchanges and specifically extended this regulation to the usage of the mail and interstate commerce.

The Securities Act of 1933

The Securities Exchange Act of 1934

Teh Sherman Act

The Anti-trust Act of 1933

When Facebook initiated its IPO in May of 2012, the price was $38 per share, and technical issues on
the NASDAQ complicated the offering. After the IPO, the stock traded_________________________________, meaning that it stayed within a range that did not indicate strong upward or downward movement. However, Facebook has gone on to trade at values more than four times its initial IPO valuation, due to investor beliefs and expectations. Not all stocks go up in value after their IPO; some vacillate between highs and lows and frustrate investors with their unstable valuation swings.

sideways

laterally

up and down

east and west

The Securities Exchange Act of 1934 created numerous reporting requirements for public companies. The purpose of these requirements was ________________________________________________, that is, keeping the public up to date and informed of changes that might impact securities prices.

transparency

fraud

a collective effort

thwart insider trading

Answer 1

Point 1) self-regulatory organizations (SROs)

SROs are allowed to “police” themselves, but are subject to compliance with SEC regulations.

Point 2) initial public offering (IPO)

IPOs help in initial sale of a security

Point 3) The Securities Act of 1933

This was a base for 1934 act.

Point 4) laterally

Laterally meant that it stayed within a range that did not indicate strong upward or downward movement.

Point 5 ) transparency

Transparency helps keep public up to date.