FIN 419 Week 5 DQs - 7636

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What is the SEC?

How does it impact financial decision-making?

What constraints might it put on a company? 

What would you consider to be a global equivalent(s) to the SEC within the USA? 

Are there individual reporting requirements comparable?  Explain?

What is a multinational corporation?


What are some of the constraints facing today’s multinational corporations?

Predict how joint ventures and international mergers might address some of those constraints.

What would be the constraints specifically dealing with different currencies and market rate


Solution Description

Established in 1934 after the great depression, the Securities and Exchange Commission (SEC) is, “The federal regulatory body that governs the sale and listing of securities” (Gitman, 2006, p. 46). SEC’s mission is creating and enforcing regulations that set the standards for the public disclosure of financial information by public companies. There are four major divisions of the SEC I.e. Market Regulation division, Corporate Finance division, Investment Management division, and Enforcement division.


The SEC impacts financial decision-making by setting legal requirements. It also provides clear image of the working conditions of the US companies, so that it will be very easy or risk free for the investors to take an appropriate financial decision about the investment in the stock, bonds, mutual funds, etc.


Constraints that the SEC may put on a company are selling procedures; SEC imposes legal restrictions on companies to protect investors. Companies must put direct monetary cost of borrowing shares. Companies must maintain 50% marginal requirement.

Established in 1995, the World Trade Organization (WTO) would be the global equivalent to the SEC within the USA. “The World Trade Organization (WTO) is the only global international organization dealing with the rules of trade between nations” (WTO, 2010). The goal of the WTO is to assist importers conduct business.


According to the WTO:

The WTO provides a forum for negotiating agreem