What is the 'Exchange Act'?

What is the 'Exchange Act'?

The Exchange Act is an act that was put out there to allow individuals to get current financial information on companies that are trading on the exchange or companies that are traded over the counter or what we consider the OTC market. The advantage is by having the information you can make, hopefully some type of rational decision on whether or not to purchase that particular company or not to purchase them. If we don't have financials in order to back our decisions, we are unable to determine whether or not a company is solvent or whether or not a company has on-going cash flow. These sort of items allow us to have a better understanding of the companies themselves.