Final answer:
The Securities Exchange Act of 1934 specifically regulates the setup, registration, and reporting of brokers and dealers, and it established the Securities and Exchange Commission (SEC) to oversee the trading of securities on stock exchanges like the NYSE.
Step-by-step explanation:
The Securities Exchange Act of 1934 regulates the setup, registration, and reporting of brokers and dealers. This Act plays a crucial role in the overall regulatory framework that oversees and supervises the sale of securities, as well as those who sell them, including brokers, dealers, and bankers. It is designed to govern the secondary trading of securities, which mainly takes place on organized stock exchanges like the New York Stock Exchange (NYSE).
The Act also established the Securities and Exchange Commission (SEC), which has the authority to regulate the securities industry and its participants to prevent fraudulent activities and promote fair trading practices. Stock exchanges, like the NYSE and AMEX, facilitate the trading of securities but must comply with regulations set forth by the SEC. The Securities Exchange Act of 1934 does not regulate the registering of securities (addressed by the Securities Act of 1933), registration of mutual funds or the Blue Sky registration of securities; instead, it focuses on the post-registration requirements and the regulation of the transactions and individuals associated with the trading of securities after they have been issued.