What is the purpose of the SEC in relation to public companies?

The purpose of the SEC, or Securities and Exchange Commission, in relation to public companies primarily revolves around overseeing periodic financial filings. Public companies are required to disclose important financial information and report their financial performance to ensure transparency and protect investors. This regulatory framework helps maintain fair trading practices and allows investors to make informed decisions based on the financial health and operational activities of these companies.

The SEC sets rules that mandate regular disclosures such as quarterly earnings reports and annual filings, which include comprehensive financial statements. These filings are crucial for maintaining investor confidence in the integrity of the financial markets. By ensuring that all material information is accessible and that companies meet standardized reporting requirements, the SEC fosters a more informed investing environment.