What does the Securities and Exchange Commission (SEC) do?

The Securities and Exchange Commission (SEC) is primarily responsible for regulating the securities markets to protect investors. Its main mission is to ensure that all investors have access to important financial information about the companies whose securities they are considering, thereby fostering transparency and trust in the financial markets. The SEC enforces securities laws, regulates stock exchanges, and oversees brokerage firms and investment advisors, thereby helping to maintain fair market practices and prevent fraud.

In this context, the other options do not accurately represent the core functions of the SEC. Providing loans to small businesses is typically the role of banks or specialized financial institutions rather than a regulatory body like the SEC. Selling government bonds to raise funds is a function of the Treasury Department, which manages government financing. Evaluating risk levels for financial institutions aligns more with the roles of regulatory agencies like the Federal Reserve or the Office of the Comptroller of the Currency, rather than the SEC's focus on securities regulation and investor protection.