Series 28: Chapter Five: Supervisory Responsibilities And Business Conduct

Chapter Five

Supervisory Responsibilities and Business Conduct

At the height of the Great Depression, Congress passed the Securities Act of 1933 to regulate the issuance of new securities and the Securities Exchange Act of 1934 to regulate trading in the secondary market. The Exchange Act gave securities exchanges, such as the New York Stock Exchange, the authority to regulate themselves, under the condition that they register with the SEC and devise a set of rules consistent with the guidelines established by the Act.

A few years later, the Maloney Act of 1938 extended self-regulation to the over-the-counter (OTC) market. With this legislation, which became Section 15A of the Exchange Act, broker-dealers were required to register with the SEC and become members of a registered national securities as