What is the primary regulatory purpose of the Securities Exchange Act of 1934?

The primary regulatory purpose of the Securities Exchange Act of 1934 is to prevent fraud in securities transactions. This act was enacted following the stock market crash of 1929 to restore investor confidence and promote fairness in the securities markets. It established a framework for regulating the trading of securities in the secondary market, focusing significantly on preventing deceptive practices and fraud in the trade and sale of securities.

The act requires that companies provide comprehensive information to regulators and the public, thereby enhancing transparency and accountability in the securities market. Additionally, it governs the behavior of those involved in the securities industry, such as broker-dealers, ensuring they operate with integrity and adhere to ethical standards.

While the act does involve disclosure requirements and the conduct of broker-dealers, the overarching goal is to combat fraud and ensure that investors are protected from dishonest practices in their trading activities. This focus on fraud prevention is what distinguishes this act from others that may emphasize different aspects of securities regulation, such as the regulation of new issues or establishing conduct for broker-dealers directly.