US Securities and Exchange Commission (SEC) Brokers 2024

SEC regulations

This guide ranks the top brokers regulated by the US Securities and Exchange Commission (SEC), a federal government agency responsible for protecting investors within the securities markets. We investigate the agency’s powers and regulations, track record and how brokers are supervised. Our team also explain how to carry out a company search and a regulations check.

Best SEC Brokers

The SEC enforces regulations and oversees firms to protect US retail traders. These are the top brokers authorized by the SEC:

#1 - Interactive Brokers

Why We Chose Interactive Brokers

Interactive Brokers (IBKR) is a premier brokerage, providing access to 150 markets in 33 countries, along with a suite of comprehensive investment services. With over 40 years of experience, this Nasdaq-listed firm adheres to stringent regulations by the SEC, FCA, CIRO, and SFC, amongst others, and is one of the most trusted brokers for trading around the globe.

"Interactive Brokers is one of the best brokers for advanced day traders, providing powerful charting platforms, real-time data, and customizable layouts, notably through the new IBKR Desktop application. Its superb pricing and advanced order options also make it highly attractive for day traders, while its diverse range of equities is still among the best in the industry."

- DayTrading Review Team
  • Instruments: Stocks, Options, Futures, Forex, Funds, Bonds, ETFs, Mutual Funds, CFDs, Cryptocurrencies
  • Regulator: FCA, SEC, FINRA, CFTC, CBI, CIRO, SFC, MAS, MNB
  • Platforms: Trader Workstation (TWS), IBKR Desktop, GlobalTrader, Mobile, Client Portal, AlgoTrader, OmniTrader, eSignal, TradingCentral
  • Minimum Deposit: $0
  • Minimum Trade: $100
  • Leverage: 1:50

#2 - Moomoo

Why We Chose Moomoo

Moomoo is an SEC-regulated app-based investment platform that offers a straightforward and affordable way to invest in Chinese, Hong Kong, Singaporean, Australian and US stocks, ETFs and other assets. Margin trading is available and the brand offers a zero-deposit account as well as several bonuses.

"Moomoo remains an excellent choice for new and intermediate stock traders who want to build a diverse investment portfolio. What really stands out is the broker's user-friendly app and the low trading fees."

- DayTrading Review Team
  • Instruments: Stocks, Options, ETFs, ADRs, OTCs
  • Regulator: SEC, FINRA, MAS, ASIC, SFC
  • Platforms: Desktop Platform, Mobile App
  • Minimum Deposit: $0
  • Minimum Trade: $0
  • Leverage: 1:2

#3 - eToro USA

Why We Chose eToro USA

eToro is a social investing platform that offers short-term and long-term trading on stocks, ETFs, options and crypto. The broker is well-known for its user-friendly community-centred platform and competitive fees. With FINRA and SIPC oversight and millions of users across the world, eToro is still one of the most respected brands in the industry. eToro securities trading is offered by eToro USA Securities, Inc.

"eToro remains a top pick for traders looking for leading social investing and copy trading services. With a low deposit, zero commissions and an intuitive platform, the broker will meet the needs of newer day traders."

- DayTrading Review Team
  • Instruments: Stocks, Options, ETFs, Crypto
  • Regulator: SEC, FINRA
  • Platforms: eToro Trading Platform & CopyTrader
  • Minimum Deposit: $10
  • Minimum Trade: $10

#4 - Empower

Why We Chose Empower

Empower, previously Personal Capital, is a US-based and SEC-regulated trading platform and advisory firm. Clients can access pensions, robo-advisors and do-it-yourself investing in stocks, mutual funds, fixed-income products and ETFs. Millions of clients trust Empower with their long-term investments, attracted by the suite of free financial planning tools and excellent reputation.

"Empower is best for hands-off investors looking for a US-regulated platform and robo-advisor with free financial planning services. However, investors need to be willing to make a large minimum investment and pay higher than average fees for premium services."

- DayTrading Review Team
  • Instruments: Stocks, ETFs, Mutual Funds, Fixed Income
  • Regulator: SEC, FINRA
  • Platforms: Own
  • Minimum Deposit: $1 (Cash), $100,000 (Robo Advisor)
  • Minimum Trade: Variable

#5 - Personal Capital

Why We Chose Personal Capital

Empower (formerly Personal Capital) is a popular, SEC-regulated US financial advisory and investment platform that offers pensions, ready-made investment plans and do-it-yourself, commission-free investing through a large range of mutual funds, ETFs, individual equities and fixed-income securities. The broker has an impressive 3.4 million clients.

"Personal Capital (now Empower) is a great option for investors seeking a flexible way to build an investment portfolio or pension plan. It is a particularly good fit for US traders owing to the SEC oversight."

- DayTrading Review Team
  • Instruments: Stocks, ETFs, Mutual Funds, Fixed Income
  • Regulator: SEC
  • Platforms: Own
  • Minimum Deposit: $1 (Cash), $100,000 (Robo Advisor)
  • Minimum Trade: Variable

What is the SEC?

The independent federal government agency aims to protect investors while ensuring the functionality of securities markets. The SEC also helps achieve transparency in the markets while preventing frauds, scams and malpractice.

To do the above, the regulatory body utilises a range of reporting and enforcement techniques. In addition, prospective members, such as forex brokers, must complete registration for a SEC licence before they can conduct business.

SEC Brokers

#1 - Interactive Brokers

Why We Chose Interactive Brokers

Interactive Brokers (IBKR) is a premier brokerage, providing access to 150 markets in 33 countries, along with a suite of comprehensive investment services. With over 40 years of experience, this Nasdaq-listed firm adheres to stringent regulations by the SEC, FCA, CIRO, and SFC, amongst others, and is one of the most trusted brokers for trading around the globe.

"Interactive Brokers is one of the best brokers for advanced day traders, providing powerful charting platforms, real-time data, and customizable layouts, notably through the new IBKR Desktop application. Its superb pricing and advanced order options also make it highly attractive for day traders, while its diverse range of equities is still among the best in the industry."

- DayTrading Review Team
  • Instruments: Stocks, Options, Futures, Forex, Funds, Bonds, ETFs, Mutual Funds, CFDs, Cryptocurrencies
  • Regulator: FCA, SEC, FINRA, CFTC, CBI, CIRO, SFC, MAS, MNB
  • Platforms: Trader Workstation (TWS), IBKR Desktop, GlobalTrader, Mobile, Client Portal, AlgoTrader, OmniTrader, eSignal, TradingCentral
  • Minimum Deposit: $0
  • Minimum Trade: $100
  • Leverage: 1:50

#2 - Moomoo

Why We Chose Moomoo

Moomoo is an SEC-regulated app-based investment platform that offers a straightforward and affordable way to invest in Chinese, Hong Kong, Singaporean, Australian and US stocks, ETFs and other assets. Margin trading is available and the brand offers a zero-deposit account as well as several bonuses.

"Moomoo remains an excellent choice for new and intermediate stock traders who want to build a diverse investment portfolio. What really stands out is the broker's user-friendly app and the low trading fees."

- DayTrading Review Team
  • Instruments: Stocks, Options, ETFs, ADRs, OTCs
  • Regulator: SEC, FINRA, MAS, ASIC, SFC
  • Platforms: Desktop Platform, Mobile App
  • Minimum Deposit: $0
  • Minimum Trade: $0
  • Leverage: 1:2

#3 - eToro USA

Why We Chose eToro USA

eToro is a social investing platform that offers short-term and long-term trading on stocks, ETFs, options and crypto. The broker is well-known for its user-friendly community-centred platform and competitive fees. With FINRA and SIPC oversight and millions of users across the world, eToro is still one of the most respected brands in the industry. eToro securities trading is offered by eToro USA Securities, Inc.

"eToro remains a top pick for traders looking for leading social investing and copy trading services. With a low deposit, zero commissions and an intuitive platform, the broker will meet the needs of newer day traders."

- DayTrading Review Team
  • Instruments: Stocks, Options, ETFs, Crypto
  • Regulator: SEC, FINRA
  • Platforms: eToro Trading Platform & CopyTrader
  • Minimum Deposit: $10
  • Minimum Trade: $10

#4 - Empower

Why We Chose Empower

Empower, previously Personal Capital, is a US-based and SEC-regulated trading platform and advisory firm. Clients can access pensions, robo-advisors and do-it-yourself investing in stocks, mutual funds, fixed-income products and ETFs. Millions of clients trust Empower with their long-term investments, attracted by the suite of free financial planning tools and excellent reputation.

"Empower is best for hands-off investors looking for a US-regulated platform and robo-advisor with free financial planning services. However, investors need to be willing to make a large minimum investment and pay higher than average fees for premium services."

- DayTrading Review Team
  • Instruments: Stocks, ETFs, Mutual Funds, Fixed Income
  • Regulator: SEC, FINRA
  • Platforms: Own
  • Minimum Deposit: $1 (Cash), $100,000 (Robo Advisor)
  • Minimum Trade: Variable

#5 - Personal Capital

Why We Chose Personal Capital

Empower (formerly Personal Capital) is a popular, SEC-regulated US financial advisory and investment platform that offers pensions, ready-made investment plans and do-it-yourself, commission-free investing through a large range of mutual funds, ETFs, individual equities and fixed-income securities. The broker has an impressive 3.4 million clients.

"Personal Capital (now Empower) is a great option for investors seeking a flexible way to build an investment portfolio or pension plan. It is a particularly good fit for US traders owing to the SEC oversight."

- DayTrading Review Team
  • Instruments: Stocks, ETFs, Mutual Funds, Fixed Income
  • Regulator: SEC
  • Platforms: Own
  • Minimum Deposit: $1 (Cash), $100,000 (Robo Advisor)
  • Minimum Trade: Variable

Purpose

The SEC’s mission is split up into three distinct parts:

  1. Protect investors
  2. Facilitate capital formation
  3. Maintain and encourage market functionality

It’s worth noting the primary purpose is to supervise both organisations and individuals in the markets. Specifically, this means the agency turns its attention to brokers, exchanges, dealers, and registered investment advisors. Their scope extends from insider trading investigations to forex day trading rules and regulations.

Fortunately, you don’t need to wait for the news to find out about new regulations and filings. This is because the SEC facilitates investor access to registration statements, financial reports and other documentation via its EDGAR database.

The regulatory agency receives its mandate from several pieces of legislation:

The SEC is financed by the taxpayer, as well as through registration and nominal fees. The SEC charges a tiny transaction fee on the value of all equities sold. This cost is separate to any broker commissions. These fees are given to the US Treasury, who then pay for the SEC’s regulation of brokers and markets.

History

In 1929 the US stock market crashed. As a result of false or misleading information, securities from a number of companies ended up worthless. Unsurprisingly, public confidence in the markets plummeted.

To repair the damage, following conferences and debate, Congress passed the Securities Act of 1933 and the Securities Exchange Act of 1934. Section 4 of the latter gave life to the SEC. The initial schedule directed them to ensure companies made truthful statements and that institutions, such as brokers, acted fairly and honestly.

Following expansion over the years, the meaning and purpose of the SEC have also extended to giving lending guidance and maintaining institution standings.

Structure

Divisions

The SEC headquarters can be found in Washington DC. The structure is relatively straightforward. The body has five divisions:

  1. Enforcement – The enforcement department works alongside the other divisions. They conduct investigations into securities violations and regulations. They have a range of powers, which will be broken down further below.
  2. Trading and Markets – This division manages self-regulatory bodies, including the FINRA and MSRB. It also includes broker-dealers and investment houses. The department plays a key role in amending regulations and monitoring industry operations. Note the SEC outsources the majority of enforcement to the FINRA. As such, all trading companies without regulatory oversight from other SROs must hold a licence with FINRA. Finally, individual traders must pass FINRA exams in order to be a registered representative.
  3. Corporation Finance – This department supervises disclosures made by public companies. It is also concerned with the registration of transactions and mergers.
  4. Investment Management – As the name suggests, this department manages registered investment companies, including investment advisors. Duties include responding to no-action letters and interpreting legislation and regulations.
  5. Economic and Risk Analysis – This division offers insight and analysis to aide SEC regulations and policy development. This includes potential risks and data analytics.

Offices

The SEC also has 11 regional offices. Some of the most relevant include the offices of:

Powers & Regulations

There are a number of actions the SEC takes to ensure compliance with regulations. One of the standard actions requires regulated companies to submit quarterly and annual financial reports. Company executives may also have to offer a narrative account, known as management discussion and analysis (MD&A). As mentioned above, consumers can head to the online EDGAR database to view important information.

Access to the above information is perhaps more important now than ever before. This is because you may get access to cryptocurrency and blockchain data to help you make informed investment decisions.

In the case of civil suits, the SEC primarily uses two sanctions:

  1. Injunctions – These aim to prevent future violations. The consequences of ignoring injunctions can range from fines to prison time. Before an injunction is given out, the body can demand documentation and testimony from suspects and witnesses.
  2. Penalties and disgorgements – The body can also take action that sees culprits pay hefty fines or give up profits. In addition, the commission may prevent individuals from acting as company directors.

Regulatory action can also include suspending registration, as well as cease and desist orders.

Note the regulatory agency does not have criminal authority. Instead, it can refer issues to the necessary prosecutors. Alternatively, it can seek civil action in a US District Court or an independent administrative proceeding.

It’s also worth bearing in minds the words used in liquidity rules and financial reporting manuals, for example, are often difficult to misinterpret. As a result, the regulatory agency is often successful when it comes to pursuing enforcement actions.

Track Record

The SEC has brought a number of enforcement actions against regulated and approved brokers. In fact, the regulatory body plays a significant role in almost every large case of financial malpractice.

Often, offences include fraud, misleading or false information and insider trading. In particular, the SEC was integral in bringing to justice a number of institutions in the wake of the 2008 financial crisis. The agency helped return billions of dollars to investors.

In fact, by the end, 204 bodies and individuals were charged and $4 billion in penalties were given out. Goldman Sachs faced the largest Wall Street penalty for monetary relief, coming in at a staggering $550 million.

The SEC has also come down on brokers over the years. More recently, however, it has ICOs in the crosshairs. In particular, enforcement action has been taken over marketing practices. For example, in 2017, the SEC brought an abrupt halt to the Munchee ICO.

Criticisms of the SEC

The majority of SEC criticism in recent years has been in regard to:

Final Thoughts

There is no doubt SEC regulations play a key role in protecting consumers from fraudulent and misleading day trading brokers, among other financial institutions. Their enforcement activity is aggressive, despite some criticism. Public perception of the SEC is improving and they remain reputable in comparison to other bodies elsewhere in the world.

So before you pursue registration with a brokerage, check on the official SEC website that they are licensed on a regulated brokers list.