Write a short note on the regulation of the U.S. securities markets.

What will be an ideal response?

Both the government and the industry itself regulate the U.S. securities markets. At the base of the regulatory pyramid, stock brokerage firms maintain compliance departments to oversee their own operations. At the next level, the NYSE, the American Stock Exchange, NASDAQ, and the regional exchanges are responsible for monitoring their member firms’ business practices, funding adequacy, compliance, and integrity. They also use sophisticated computer surveillance systems to scrutinize trading activity. The Securities and Exchange Commission (SEC) is the federal government agency that oversees the market’s self-regulation.