Author: Frances Franco, CPA, CFF, CVA: SingerLewak, LLP

The question often arises regarding the difference between the Securities and Exchange Commission (“SEC”) rules and regulations and the SEC staff guidance.  By way of background, Congress created the Securities and Exchange Commission with the Securities Exchange Act of 1934.  This Act empowers the SEC with a broad authority over all aspects of the securities industry.  The SEC’s authority includes power to register, regulate, and oversee the various securities exchanges as well as the nation’s securities self-regulatory organizations, as an example.  The Act provides the SEC with disciplinary powers over regulated entities and the individuals associated with the entities.  The SEC has established rules and regulations and SEC staff guidance to govern and guide the securities industry.

The SEC rules and regulations, in addition to several Acts since 1933, comprise the laws that govern the securities industry.  The SEC rules and regulations activity includes concept releases, interpretive releases, policy statements, proposed rules, and final rules. Concept releases solicit the public’s views on securities issues, so the SEC can better evaluate the need for future rule-making.  The purpose of SEC interpretative releases is to publish the SEC views and interpret the federal securities laws and SEC regulations.  With respect to policy statements, the SEC issues policy statements to clarify its position on a specific matter.

SEC staff guidance are staff interpretations which provide guidance to those who must comply with the federal securities laws.  The staff guidance is not legally binding as it represents the views of the SEC staff, however, it is a guide to the securities industry.  The staff guidance consists of the following categories:

  • Staff Accounting Bulletins
  • Staff Legal Bulletins
  • Compliance and Disclosure Interpretations
  • Division of Corporation Finance Financial Reporting Manual
  • CF Disclosure Guidance Topics

In summary, the SEC rules and regulations are part of the laws that govern the securities industry and the SEC staff guidance serves as a guide to interpret and implement the laws that govern the securities industry.

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