Which groups are subject to SEC Rules 10b-5, the anti-fraud provisions?

The correct choice identifies that the SEC Rules 10b-5, which are part of the Securities Exchange Act of 1934, apply not only to issuers but also to underwriters. These rules are designed to protect investors from fraudulent practices in the securities markets.

Under these provisions, anyone involved in the offer or sale of securities, including issuers who create and sell the securities, as well as underwriters who facilitate these transactions, can be held accountable. This framework aims to ensure transparency and financial integrity, and it is critical that both issuers, who provide the financial instruments, and underwriters, who help distribute them, adhere to the anti-fraud liabilities established by the SEC.

This understanding highlights the scope of responsibility within the securities industry, emphasizing that both entities play a role in maintaining market integrity and protecting investors from misleading information and fraudulent activities.