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The Commission's rulemaking process is intended to ensure that aspects of regulatory changes are analyzed before a change takes effect. A need for rulemaking can be identified internally by the Commission or externally by Congress, another government agency, private industry, or the general public.

The rulemaking process usually begins with a rule proposal If the Commission approves the rule proposal, it is then presented to the public (through publication in the Federal Register and on the Commission's website) for a specified period of time. The public's input is considered as a final rule is crafted. Rules are adopted by a vote of the full Commission.

The Office of the Secretary (OS) reviews rules for compliance with Federal Register requirements, sends related documents to various agencies involved in the process, issues official rulemaking documents, coordinates Commission approval of rules, and maintains certain rule-related files. OS also receives and organizes public comments and then forwards them to the Office of Filings and Information Services (OFIS) and to the relevant division staff.

The Division of Enforcement was created in August 1972 to consolidate enforcement activities that previously had been handled by the various operating divisions at the Commission's headquarters in Washington. The Commission's enforcement staff conducts investigations into possible violations of the federal securities laws, and litigates the Commission's civil enforcement proceedings in the federal courts and in administrative proceedings.

Enforcement:
The Commission's mandate is to protect investors. The Commission is not authorized to act on behalf of individual investors. The Commission can bring a variety of administrative proceedings, which are heard by hearing officers and the Commission. One type of proceeding, for a cease-and-desist order, may be instituted against any person who violates the federal securities laws. With respect to regulated entities (e.g., brokers, dealers, and investment advisers) and their employees, the Commission may institute administrative proceedings to, among other things, revoke or suspend registration, or to impose bars or suspensions from employment. In both cease-and-desist proceedings and administrative proceedings against regulated persons, the Commission is authorized, among other things, to order the payment of civil penalties and disgorgement of ill-gotten gains.

Topics Covered:
This session is to provide an understanding of the SEC’s responsibilities related to rulemaking and enforcement of rules related to the financial markets. We will examine the rulemaking process and the enforcement process that all accountants and auditors must understand to ensure proper compliance with SEC laws.

Learning Objectives

  • Explore an overview of the process utilized by the SEC in rulemaking including the roles played by Market Regulation (MR), Corporate Finance (CF) or Investment Management (IM), the rulemaking divisions as well as the Office of General Counsel (OGC) and Office of Economic Analysis (OEA).
    • Understand the role played by the public in the SEC’s rulemaking process and final aspects of including the rules within the Federal Register.
    • Understand the SEC’s process of communication on new rules.
  • Discover an overview of the SEC Enforcement Division responsibilities.
  • Explore and examine the SEC’s enforcement manual and its role in providing guidance in the review of potential violations of federal securities laws.
  • Identify and understand the process of accounting and auditing enforcement releases and administrative proceedings.
  • Explore and examine recent litigation proceedings brought by the SEC division of enforcement.
Last updated/reviewed: June 8, 2021

Prerequisites

Education Provider Information

Company:
Illumeo, Inc., 75 East Santa Clara St., Suite 1215, San Jose, CA 95113
Contact:
For more information regarding this course, including complaint and cancellation policies, please contact our offices at (408) 400- 3993 or send an e-mail to .
Course Syllabus
INTRODUCTION AND OVERVIEW
  5:07Introduction to Sec Rulemaking and Enforcement Process
  6:52Laws Affecting The Securities Industry
  17:43Rulemaking Process
  4:40Roles
  15:39Enforcement
  18:33SEC Enforcement Manual
  17:05SEC Enforcement Manual Cont'd
  6:00Recent Litigation Proceedings
  2:55Summary
CONTINUOUS PLAY
  1:34:32Securities and Exchange Commission: Rulemaking and the Enforcement Process
SUPPORTING MATERIAL
  PDFSlides: Securities and Exchange Commission: Rulemaking and the Enforcement Process
  PDFSecurities and Exchange Commission: Rulemaking and the Enforcement Process Glossary/ Index
REVIEW AND TEST
  quizREVIEW QUESTIONS
 examFINAL EXAM