Final answer:
The Securities Exchange Act of 1934 chiefly addresses the regulation of organized exchanges, ensuring fair trading and the ethical behavior of brokers and dealers. It strengthens the Securities and Exchange Commission's authority over the securities industry and contains measures to prevent market abuses.
Step-by-step explanation:
The Securities Exchange Act of 1934 is primarily concerned with regulation of organized exchanges. This act plays a pivotal role in overseeing and ensuring a fair and efficient market system by regulating the transactions on stock exchanges and the conduct of brokers, dealers, and bankers involved in selling securities.
Enacted as a direct response to the fiscal irresponsibility that led to the stock market crash of 1929, the Act aimed to restore investor confidence in the securities market. Key regulations included the requirement for periodic financial reporting by companies with publicly traded securities, and it gave teeth to the Securities and Exchange Commission (SEC), the body responsible for enforcing federal securities laws and regulating the industry. This included authority over the monitoring and discipline of institutions and individuals within the market to prevent fraudulent activities, such as insider trading.
The Act also facilitated the creation of self-regulatory organizations, like the New York Stock Exchange (NYSE), with delegated authority to manage the daily operations of securities trading and enforce rules for fair conduct.