Regulation of Investments (1)

What does the Securities Act of 1933 do

Registration of securities

Delivery of current prospectus describing the fund

what is the Securities Exchange Act of 1934

• Regulates broker-dealers and entities that sell funds

• Basis for record keeping regulations

• Requires segregated custodial accounts for customers

What does the Investment Company Act of 1940 do

Defines and regulates the structure and operations of investment companies

Investment Advisers Act of 1940

Requires Federal registration of all investment advisors, including those to mutual funds and investment companies

The Employee Retirement Income Securities Act of 1974 (ERISA)

• Created Individual Retirement Accounts (IRA)

• Established minimum standards for employee benefit plans

• Establishes standards of conduct for plan fiduciaries

Pension Protection Act of 2006

Requires pension plan sponsors to accurately calculate plan obligations

Dodd-Frank Wall Street Reform and Consumer Protection Act, 2010

• Increases transparency of derivatives and regulation of financial markets

What does SEC do

• Primary regulatory agency of investing

• Monitors compliance with existing laws

• Maintains standards on use of leverage

• Ensures funds maintain effective governance systems

• Requires understandable reporting and full disclosure

• Reviews required filings of investment companies

• Develops and revises regulations

What does the Department of Labor do

Oversees pension plans including 401(k) plans

What does the Commodity Futures Trading Commission

Monitors futures and commodities trading

What does the IRS do

• Sets and enforces tax policies applicable to investments

Financial Industry Regulatory Authority and CFA Institute Slides 6 to 12