What is the role of the Securities and Exchange Commission (SEC)?

The Securities and Exchange Commission (SEC) plays a critical role in overseeing and regulating the securities industry in the United States. Specifically, the SEC is tasked with ensuring that the markets operate in a fair and efficient manner. This involves enforcing securities laws designed to protect investors, maintain orderly markets, and facilitate capital formation.

One of the primary functions of the SEC is to require public companies to disclose important financial information, which helps investors make informed decisions. By ensuring that information is made available to all investors, the SEC works to prevent fraudulent practices and insider trading, promoting a level playing field for all market participants. The emphasis on fair and efficient markets helps build investor confidence, which is essential for the healthy functioning of the economy.

The other options do not accurately reflect the SEC's primary role. Auditing financial statements is typically conducted by independent auditors, while tax compliance is overseen by the Internal Revenue Service (IRS). Similarly, promoting employee relations falls outside the SEC's jurisdiction, which focuses more on market regulation rather than workplace conditions or relationships.