U.S. Federal Securities Regulation

U.S. Federal Securities Regulation

I. Statutory Framework (Acts of Congress)

  • Securities Act of 1933 (“’33 Act”)

    • Governs primary-market offers and sales.

  • Securities Exchange Act of 1934 (“’34 Act”)

    • Regulates secondary markets and broker-dealers.

  • Investment Advisers Act of 1940 (“Advisers Act”)

    • Covers investment advisers.

  • Investment Company Act of 1940 (“Company Act”)

    • Pertains to pooled funds available to the public.

  • Other Overlay Statutes

    • Includes Dodd-Frank 2010, JOBS Act 2012, Bank Secrecy Act/AML, etc.

II. Regulatory Focus (Who/What is Being Regulated)

  • Broker-Dealers (BDs)

  • Investment Advisers (RIAs / ERAs)

  • Investment Companies

    • Mutual funds, ETFs, CEFs, UITs.

  • Private Funds

    • Hedge funds, PE, VC.

    • Exempt from the “Investment Company” definition; advisers fall under Investment Advisers Act.

  • Issuers, Exchanges/ATSs, Transfer Agents, etc.

    • Not the current focus.

III. SEC Rule Sets (Specific Regulations Under Each Act)

A. Broker-Dealer Regulations - Governed by the ’34 Act

  • Rule 15c3-1: Net Capital

  • Rule 15c3-3: Customer Protection / Reserve

  • Regulation SHO: Short-sales

  • Regulation ATS / SCI / M: Alternative trading systems, market manipulation

  • Rule 10b-5: Anti-fraud (applies universally)

  • Regulation SP: Privacy

  • Regulation BI: Best Interest (retail)

  • Rules 17a-3 / 17a-4: Books & Records

B. Investment Adviser Regulations - Governed by the Advisers Act

  • Rule 203-1: Registration (Form ADV)

  • Rule 204-2: Books & Records

  • Rule 204A-1: Code of Ethics

  • Rule 206(4)-1: Marketing Rule (new combined ads/testimonials)

  • Rule 206(4)-2: Custody Rule

  • Rule 206(4)-7: Compliance Program Rule

  • Rule 204(b)-1: Form PF (for large private-fund advisers)

C. Investment Company Regulations - Governed by the Company Act

  • Sections 3(c)(1) & 3(c)(7): Private-fund carve-outs

  • Rule 2a-7: Money-Market Fund restrictions

  • Rule 22e-4: Liquidity Risk Management

  • Rules 30e-3 / Form N-CSR, N-PORT, N-CEN: Reporting requirements

  • Rules 17a-7 & 17e-1: Affiliate transactions / trading

D. Private-Fund Regulations (Subset of A & B)

  • Exemptions 3(c)(1) & 3(c)(7): Keep the fund outside the Company Act

  • Advisers regulated under the Advisers Act: Key items include Form PF, Marketing Rule, Custody, etc.

IV. Self-Regulatory Organization Rules (Granular Detail)

  • FINRA Rules for Broker-Dealers (under ’34 Act delegation)

    • Rule 2210: Communications with Public (BD analogue to IA “Marketing Rule”)

    • Rule 3110: Supervision

    • Rule 5310: Best Execution

    • Rule 4511: Books & Records, etc.

  • MSRB Rules: For municipal securities.

  • NFA/CFTC Rules: For commodities.

V. Interpretations and Guidance (Events)

  • SEC Releases, Staff Bulletins, Risk Alerts

  • FINRA Regulatory Notices

  • Court Decisions (e.g., Supreme Court’s Lorenzo, Kokesh, etc.)

Quick Cross-Reference Examples

  • RIAs → Advisers Act → Rule 206(4)-1 “Marketing Rule” (Regulation)

  • Private Fund → Company Act §3(c)(1)/(7) exemption + Adviser’s Rule set above

  • Investment Company → Company Act → Money-Market Rule 2a-7, Liquidity Rule 22e-4, etc.

  • Broker-Dealer → ’34 Act → FINRA Rule 2210 (Self-Regulatory Organization Rule) + SEC Reg BI, 15c3-1 (Regulation)

Practical Use

  1. Identify the participant (Regulatory Focus).

  2. Ascend to find the home statute (Statutory Framework).

  3. Descend into the SEC rule set (Rule Sets) for operational requirements.

  4. Further descend into SRO rules (Self-Regulatory Organization Rules) for daily procedures.

  5. Consult Events for current staff guidance or interpretive nuances.

This hierarchical structure allows you to effectively "file" any requirement - be it books & records, custody, marketing, net capital, liquidity, or AML - exactly where it belongs and indicates which regulator’s examination manual to reference for detailed information.