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Accompany you to make money in the US stock market!

Hello, everyone, I am the representative of Niuniu class!

Today is a series of courses "20 lectures on American Stock Investment".

The fourth lecture is "I have to talk about the regulatory system of American stocks."

Niu friends, please pick up the small bench and come to class together.

Perhaps the hottest news in the US stock market in the first half of the year is "Lucky financial fraud"events.

One stone stirs up a thousand wavesAs soon as the incident came out, the market paid attention to the regulatory system of the US securities market.。

On June 29th, LUCKN COFFEE DRC announced that he would withdraw his previous hearing application, formally suspend trading on NASDAQ and delist for the record. In the case of conclusive evidence of fraud, Ruixing delisting has long been doomed.

The time drags to the nearest.

Last week,$iQIYI, Inc. (IQ.US) $The US Securities and Exchange Commission (SEC) is investigating iQIYI, Inc. and asking for financial records since January 2018, as well as the financial content mentioned by the short Wolfpack Research, it said in the release of its second-quarter results.

So, what kind of thing is this SEC? What is the regulatory system of the securities market in the United States? Today, the representative of the class will use SEC to give you a good talk about the regulatory system of the US securities market.

I. the Securities Market Supervision Law of the United States

The early American securities market adopted a laissez-faire attitude, while the current securities law system and its market management system developed after a long and painful experience.

After the first World War, the American securities market developed rapidly, and a large number of funds flooded into the securities market, most of which were bank loans, which seriously affected the relationship between capital supply and demand in the securities market, and securities speculation was very strong. Driven by many reasons, it finally led to the financial crisis of 1929 in the United States.

In order not to experience such tragedies again, the Securities Act of 1933 and the Securities Exchange Act of 1934 were promulgated.The emphasis of the two films is different.

The Securities Act of 1933 emphasizes the government's supervision of securities issuance activities, while the Securities Exchange Act of 1934 focuses on the supervision of securities trading and trading activities, paying special attention to the investigation and monitoring of illegal acts of securities trading.

However, the two laws have a common contribution, that is, the establishment of the Federal Securities and Exchange Commission.

On the basis of these two laws, the legal basis of the American regulatory system has been established.

II. The regulatory system of the US securities market

With the legal basis, the whole market system began to be established.

(1) centralized administrative supervision system

According to the provisions of the Securities Exchange Act of 1934, the Securities and Exchange Commission, as the highest administrative body for the unified management of the national securities market, has certain legislative and judicial power. it specializes in managing and supervising the activities of securities issuance and trading across the country, and inspecting the activities of investment banks, securities issuers and major shareholders.

Especially since the 1940s, the United States has formulated and promulgated a series of laws and regulations to give the Securities and Exchange Commission greater authority, including the power of investigation and punishment. The supervision of the securities market is more centralized management.

(2) the Jinyu Tower-style regulatory system

Although the management system of US stocks has established a centralized administrative supervision system, it does not exclude the positive role of self-regulatory management, and even regards self-regulatory organization supervision as the cornerstone of the securities regulatory system.

The hierarchical regulation of the stock market in the United States has formed a regulatory pyramid.

At the top of the pyramid is the U.S. Congress and the Securities and Exchange Commission to monitor the market. At the bottom of the pyramid are self-regulatory organizations. Each plays a role within its own scope.

III. Securities Regulatory rules of the American Securities Market

It is important to have a regulatory system, but certain rules are needed to operate in the system. The United States has established strict securities and its regulatory rules.

1. Separate operation system. According to the separate operation systemCommercial banks should be distinguished from securities firms engaged in securities investment businessCommercial banks are not allowed to engage in securities business, and securities firms are not allowed to engage in commercial banking business.

2. The principle of prohibiting securities fraud.According to this principle, all publicly issued securities must be registered in accordance with the prescribed format, and the use of untrue statements and other fraudulent means to sell securities is prohibited, otherwise, securities issuers and relevant intermediaries will bear serious civil, administrative and even criminal responsibilities.

3. Adopt the issuance registration system and strengthen the responsibility of intermediary agencies.American companies are listed under the registration system rather than the approval system. According to the registration system, companies can apply for listing as long as they fully fulfill their information disclosure obligations, no matter how big or small, how much profit, or even whether the company's history is short or long.

IV. Regulators of the US securities market

Finally, let's talk about the regulators of the whole market. A good regulatory system needs good executors. And the regulatory system plays such a role.

1. Securities and Exchange Commission (SEC)

In the LUCKN COFFEE DRC fraud incident, various media have reported that "the US Securities and Exchange Commission has launched an investigation into Ruixing." In addition, the China Securities Regulatory Commission said it had maintained contact with the US Securities and Exchange Commission since LUCKN COFFEE DRC disclosed 2.2 billion yuan in performance fraud. "

So is there any connection between the CSRC and the US Securities Regulatory Commission? Do they have the same job functions and goals?

Let's first take a look at what is the Securities and Exchange Commission, or SEC, for short.

Established under the Securities Exchange Act of 1934, it is an independent agency and quasi-judicial body directly under the federal government of the United States, which is responsible for the supervision and management of securities in the United States.The highest authority of the securities industry in the United States.

The Securities and Exchange Commission consists of five members, and no single political party can hold more than three seats.The main responsibility isEnsure that public companies are free from financial fraud, misleading information, insider trading or other violations of securities trading laws.

There was little support for federal regulation of the securities market before the 1929 crash, but the establishment of the SEC played a vital role in restoring public confidence in the capital markets at that time.

It can be said that since the Great Depression in 1929,SEC established an era of mature reform in the US stock market.。

And then we'll compare it again.The similarities and differences between China Securities Regulatory Commission and American Securities Regulatory Commission.

1、同：Management orientation leads to the same goal by different routes

(1) both belong to the main body of securities market supervision

China Securities Regulatory Commission and SEC of the United States both belong to the government-led regulatory system, and both are the main bodies of securities market supervision.

ChinaThe Securities Association is an agency directly under the State Council and the competent department of the national securities and futures market; andAmericaThe Securities and Exchange Commission (SEC) is an independent agency authorized by Congress to implement the federal securities law system of the United States, and it is also the highest institution of securities supervision in the United States. within the scope of its authorization, the two agencies exercise management functions, maintain market order and ensure legal operation.

(2) the organizational structure and work objectives are the same.

Both the China Securities Regulatory Commission and the US SEC are mainly for the purpose of market regulation.And have the right to draft relevant bills and regulations. The membership structure of the two bodies is also very similar: one chairman and five vice-chairmen (members).

Although their written expressions are different, the basic objectives of the two institutions are to maintain the fairness, openness, justice and effectiveness of the capital market, safeguard the legitimate rights and interests of investors and promote the healthy development of the capital market.

2. Differences: management methods are quite different.

(1) different independence

American SECIt belongs to an independent agency authorized by Congress to implement the federal securities law system of the United States.Have quasi-judicial power, quasi-legislative power and independent law enforcement power。而China Securities Regulatory CommissionAs an institution directly under the State CouncilPower comes from the authorization of the State CouncilCan neither be independent from the government nor from the object of its supervision.

(2) Market expectations and roles are different.

ChinaInvestors often one-sidedly hope that the regulatory authorities will be responsible for the trend of the stock market, and often expect the Securities Regulatory Commission to play a "savior" when there are major fluctuations or stock crashes in the stock market, but the economic laws that maintain the effective operation of the securities market have been ignored again and again, and regulators are often busy with such expectations.

SECIt is clear that it has no right to interfere with the market activities and methods that the market subjects participate in, let alone introduce any policies that may have a direct "positive" or "negative" effect on the trend of the securities market.

For example, the rescue of the subprime mortgage crisis in the United States is not done by SEC, as the regulatory authority of the securities market, but by the US Treasury and the Federal Reserve, as the central bank, by injecting "liquidity" into the market.Therefore, no market participant will expect and require SEC to issue any rescue policies when the stock market fluctuates.

2. Us Financial Regulatory Authority (FINRA)

In addition to the SEC,FINRA, which belongs directly to Congress, it is also a very important organization in the US stock securities system.

FINRA is the abbreviation of US Financial Industry Regulatory Authority.The Financial Regulatory Bureau of the United States is an industry autonomous organization.. It was formed by the merger of the National Association of Securities Dealers (NASD) and the law enforcement departments of the New York Stock Exchange. Under the supervision of the Securities and Exchange Commission.

Although the Financial Regulatory Authority is only a self-regulatory organization for the over-the-counter securities market, it regulates 4400 brokerage companies, 163000 branches and 630000 registered securities representatives. To protect all individuals who invest in the United States, no matter what kind of financial products they invest in, from loans to investment companies, can get the protection of their rights and interests. And the EAA will also popularize the relevant common sense to the public who participate in the investment, as well as an educational function.

In addition, autonomous organizations will also be very powerful.FINRA has the right to impose fines, suspension of licenses or revocation from the industry on enterprises and individuals who violate laws and regulations.

It is organized in a form similar to that of China's Securities Association, but more powerful.

3. Financial Accounting Standards Board (FASB)

Compared with the former two, the Financial Accounting Standards Board, or FASB for short, is not a strict regulatory department. It is the designated private organization that sets financial accounting and reporting standards in the United States. It is a non-profit organization.

对，That's the GAAP (American Accounting Standards)Different from the International Accounting Standards (IFRS).

Complete GAAP standards play a very important role in finding financial loopholes, identifying the authenticity of corporate finance, understanding the health status of corporate finance, and improving the efficiency of supervision.

After WorldCom's anti-corruption case, Enron case and other large-scale financial fraud cases, GAAP can be said to be tempered.The Financial Accounting Standards Board provides effective financial support for market regulation.

V. Summary

As the largest securities market in the world, the securities regulatory system in the United States is also constantly developing.

Although the financial regulatory system of the United States has a strong path dependence and the institutional structure is unreasonable, the financial market of the United States is still highly developed and efficient.This is due to the strong protection of investors and financial services customers' right to know by various regulators.Especially the strict requirements for the disclosure of information in the capital market and the strong punishment for violations of laws and regulations.

Do you have a clear understanding of the US regulatory system?

Welcome to the message area for interaction!

The class representative will select 8 high participation friends in the discussion area and give 188 Niuniu points!

In addition, if you have any thoughts on the current and future courses, please don't hesitate to tell us!

Lecture 5 tomorrow"teach you how to get relevant information about companies listed in the United States."Waiting for you!

Don't break up until we see you!

Attached course link:"20 lectures on investing in American stocks"

Extracurricular reading:

Why is there such a big difference in profits between GAAP and Non-GAAP?