Securities Exchange Act

Securities Exchange Act, U.S. law passed in 1934. The Securities Exchange Act established the Securities Exchange Commission, a federal agency charged with regulating the issuance and trade of corporate stocks and bonds. The Securities Exchange Act also allows the Federal Reserve to set margin requirements, the amount a buyer of securities must pay before receiving credit. The Securities Exchange Act replaced the Securities Act of 1933. Its purpose is to prevent the fraud and other financial practices that led to the Great Depression.

See also: Securities and Exchange Commission.