Under the Securities Act of 1933, the SEC is empowered to take which of the...

The Securities Act of 1933 is built on the principle of full and fair disclosure in the primary (new issue) market. Under this framework, the SEC’s core authority is to require that material (pertinent) information be disclosed to investors so they can make informed decisions. That makes C correct. The SEC enforces registration and disclosure requirements by reviewing filings for completeness and compliance, and it can delay effectiveness or take action when disclosure is deficient. The key idea tested on the SIE is that U.S. securities regulation is disclosure-based, not merit-based.

Choice A is incorrect because the SEC does not “approve” registration statements in the sense of endorsing them; a registration statement becomes effective, but effectiveness is not an SEC “approval” of the offering. Choice B is incorrect because the SEC does not approve a security based on its investment merits—meaning the SEC does not judge whether a security is a good investment or safe for investors. Choice D is incorrect because the SEC does not “pass on” (vouch for) the accuracy of statements in a prospectus as an investment endorsement; instead, issuers and underwriters are responsible for the truthfulness and completeness of disclosures, and they may face liability for material misstatements or omissions.

For SIE purposes, remember the clean distinction: the SEC’s role is to ensure that investors receive required disclosures, not to guarantee outcomes. This is why prospectuses carry language indicating that the SEC has not approved or disapproved the securities or passed upon the merits—reinforcing that the investor must evaluate the disclosed risks and information.