ABSTRACT
This chapter focuses on securities firms, investment banks, securities brokers, and dealers. It explores mutual funds and government-sponsored enterprises (GSE). Some GSE's have issued shares of stock that are publicly held like shares in other corporations, and the stocks of these GSE's are traded on organized exchanges. The securities that GSE's issue, called government agency securities, are considered government securities for Securities and Exchange Commission (SEC) purposes. Brokers and dealers make up brokerage firms, which are securities firms that also facilitate the smooth and orderly functions of secondary financial markets. The Securities and Exchange Commission maintains active supervision of investment banks, particularly with regard to information that must be disclosed to potential investors. In addition to regulation by the SEC, the securities industry is also self-regulated by the Financial Industry Regulatory Authority (FINRA), which was created by the consolidation of regulatory functions of the National Association of Securities Dealers (NASD) and the New York Stock Exchange.
