What is the purpose of the SEC's disclosure requirements?

The Securities and Exchange Commission (SEC) is a government organization that regulates the securities markets in the United States. They ensure that these markets operate fairly and without fraud. Part of their role is to ensure investors have access to accurate and complete information about investments. The SEC has certain disclosure requirements that companies must follow if they want to sell securities to the public. The purpose of these disclosure requirements is to make sure that investors have access to all of the necessary information to make informed decisions when investing. This includes information on a company’s financial health, business operations, risks, and other important factors. The SEC requires companies to provide investors with documents such as a prospectus and annual reports. A prospectus is a disclosure document that companies provide to investors that details the company’s business activities and other pertinent information. Annual reports give an overview of the company’s performance over the previous year. The SEC also requires companies to update investors on any major changes or news. This includes notifying them of mergers, acquisitions, and any important financial matters. By providing this information, the SEC hopes to ensure that investors are making informed decisions when investing in the public markets.

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What is the purpose of the SEC's disclosure requirements?

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