The Securities and Exchange Commission is more commonly known under the acronym SEC. The SEC oversees securities exchanges, brokers and dealers of securities, investment advisors, and mutual funds. They promote fair dealings, the disclosure of market information, and fraud prevention. The SEC issues licenses for professionals to trade and deal in securities. These securities are financial instruments that represent some type of financial value, like stocks, bonds, and options.

The SEC requires surety bonds from many of its brokers and dealers. These bonds help guarantee that brokers and dealers obey all rules, laws, and regulations as outlined by the SEC. This is to help prevent fraud, embezzlement, and other forms of malpractice. The surety bond can assist in recouping any financial losses caused by the wrongdoing.