Final answer:
The Securities and Exchange Commission (SEC) federally regulates variable products in the securities market, enforcing transparency and protecting investors. Established during Roosevelt's era to restore faith in the financial systems, the SEC controls stock manipulation, supervises financial agents, and supports investor confidence. The agency's creation was pivotal in establishing a secure investment landscape, alongside institutions like the FDIC.
Step-by-step explanation:
The Securities and Exchange Commission (SEC), is the federal agency responsible for overseeing and regulating the variable products in the securities market.
These variable products could be investments whose value changes, such as variable annuities and variable life insurance policies. The SEC enforces legal standards established by the Federal Securities Act and subsequent legislation to ensure transparency and protect investors.
During the tenure of President Franklin D. Roosevelt, the SEC was created to help restore confidence in the financial system, particularly in Wall Street, after its role in the financial crisis.
This involved the institution of new regulations that curtailed fraudulent practices like 'pooling,' insider trading, and restricted the extent of 'margin' borrowing for investing in stocks. The federal government's goal was to create a safer, more trustworthy, and transparent investment environment.
The SEC's mandate also includes the supervision of brokers, dealers, and bankers, ensuring they comply with legal standards when selling securities. This regulatory oversight is crucial for maintaining the integrity of the financial markets and for investor protection.
Additionally, the Glass-Steagall Act played a part in separating banking from securities and insurance, although its repeal in the 1990s is often cited as a contributing factor to the 2008 Financial Crisis. Conversely, the establishment of the Federal Deposit Insurance Corporation (FDIC) insured depositors' money, up to a certain limit, reducing the likelihood of bank runs and bolstering public trust in the banking system.