SEC Securities Disclosure: Background and Policy Issues (CRS Report for Congress)
| Release Date |
Revised Aug. 20, 2024 |
| Report Number |
IF11256 |
| Report Type |
In Focus |
| Authors |
Eva Su |
| Source Agency |
Congressional Research Service |
| Older Revisions |
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Summary:
Disclosure requirements are the cornerstone of federal
securities regulation. One of the key federal securities laws,
the Securities Act of 1933 (P.L. 73-22), is often referred to
as the “truth in securities” law. As this name suggests, the
1933 act focuses on disclosure, specifically requiring
companies offering securities, such as stocks or bonds for
public sale, to provide truthful information about these
securities and the risks associated with investing in them.
Similarly, the Securities Exchange Act of 1934 (P.L. 73-
291), requires companies with publicly traded securities to
periodically report certain information on an ongoing basis.
The disclosure-based regulatory philosophy is consistent
with Supreme Court Justice Louis Brandeis’s famous quote
that “sunlight is said to be the best of disinfectants; electric
light the most efficient policeman.” In practice,
transparency through disclosure seeks to inform investors
and policymakers and enables market mechanisms to price
risk and deter fraud. This In Focus discusses the current
disclosure regime and analyzes relevant policy issues.
