The U.S. Securities and Exchange Commission (SEC) is the federal agency responsible for regulating the securities markets and protecting investors. Established in 1934 after the Great Depression, the SEC enforces securities laws, oversees market participants, and ensures that financial institutions operate with transparency and accountability.
In the context of anti-money laundering (AML) and financial crime compliance, the SEC works alongside other regulators, such as the Financial Crimes Enforcement Network (FinCEN), to ensure that broker-dealers, investment advisers, and securities exchanges implement robust compliance programs.
SEC
The SEC is an independent U.S. government agency that oversees securities markets, regulates public companies, and enforces laws designed to protect investors and maintain fair, orderly, and efficient markets.
Key responsibilities include:
Requiring public companies to disclose accurate financial information.
Overseeing securities exchanges, brokers, and investment advisers.
Enforcing laws against insider trading, fraud, and market manipulation.
Supporting AML compliance obligations in coordination with FinCEN and the U.S. Treasury.
By holding firms accountable, the SEC plays a vital role in preventing financial crime and safeguarding market integrity.
Why The SEC Matters In AML Compliance
The SEC matters in AML compliance because the securities sector can be exploited by criminals for money laundering, market manipulation, or fraud.
Broker-dealers and other registered entities must implement AML programs that meet the standards outlined by FinCEN and enforced with SEC oversight.
Investor protection: The SEC enforces strict reporting rules to prevent fraud and misconduct.
Market integrity: Robust oversight helps maintain confidence in U.S. markets.
AML alignment: Broker-dealers are subject to AML program rules under the Bank Secrecy Act, monitored by both SEC and FinCEN.
International cooperation: The SEC works with foreign regulators and global bodies to align securities regulation and financial crime prevention.
Core Functions Of The SEC In Compliance
The SEC’s role spans supervision, enforcement, and coordination with other agencies.
Supervision Of Market Participants
The SEC oversees securities exchanges, brokers, clearing agencies, and investment advisers, ensuring they comply with AML and market regulations.
Enforcement Of Securities Laws
It investigates and prosecutes insider trading, fraud, and money laundering schemes connected to securities activity.
Coordination With FinCEN And Treasury
The SEC ensures broker-dealers and securities firms implement AML programs consistent with the Bank Secrecy Act, working with FinCEN to align standards across the U.S. regulatory framework.
The Future Of SEC Oversight In Compliance
The SEC’s role in compliance is expanding as markets become more digital and global.
Crypto-assets: The SEC has increased scrutiny on digital asset markets and exchanges to prevent illicit activity.
Data-driven regulation: Advanced analytics and AI tools are being used to detect fraud, suspicious trading, and financial crime patterns.
Cross-border cooperation: The SEC continues to expand its collaboration with international regulators to align AML standards and address global risks.
The SEC’s official site highlights its mission to protect investors, maintain fair markets, and facilitate capital formation, all of which depend on strong compliance.
Strengthen Your SEC-Related Compliance Framework
The SEC plays a central role in ensuring transparency and AML compliance in the U.S. securities sector. Institutions that align with its rules reduce regulatory risk while protecting their reputation.
Facctum’s Transaction Monitoring and Alert Adjudication solutions help financial institutions meet SEC-aligned compliance obligations by ensuring suspicious activity is identified, escalated, and documented effectively.
Contact Us Today To Strengthen Your AML Compliance Framework
