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Securities and Exchange Commission (SEC) definition and meaning | AML glossary

What is the Securities and Exchange Commission (SEC)? Definition and AML compliance meaning.

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Securities and Exchange Commission (SEC) definition: What it means in AML compliance.

The Securities and Exchange Commission (SEC) is the primary financial regulator in the United States responsible for enforcing securities laws, protecting investors, and ensuring fair and efficient markets. Established in 1934, the SEC oversees public companies, financial institutions, and securities markets to prevent fraud, insider trading, and other financial crimes.

The Securities and Exchange Commission’s role in financial crime prevention.

The SEC enforces Anti-Money Laundering (AML) and financial crime regulations by:

  • Regulating securities markets to ensure transparency and integrity.
  • Investigating insider trading, securities fraud, and market manipulation.
  • Overseeing corporate disclosures to protect investors from misleading financial statements.
  • Collaborating with international regulators to combat cross-border financial crime.

Securities and Exchange Commission and AML Compliance.

Although the SEC does not directly enforce AML laws, it works closely with the Financial Crimes Enforcement Network (FinCEN) and other regulatory bodies to ensure that financial institutions comply with AML obligations. This includes monitoring firms for suspicious transactions, ensuring accurate record-keeping, and enforcing compliance programs to prevent illicit financial activities.

Does the Securities and Exchange Commission matter to UK businesses?

While the SEC primarily regulates US markets, UK-based firms with US operations, securities dealings, or investor relations must ensure they comply with SEC regulations. Non-compliance can lead to fines, sanctions, and reputational damage. Businesses involved in cross-border financial transactions should stay informed about SEC enforcement actions and regulatory expectations.

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