What legislation created the Securities Exchange Commission as an independent regulatory body?

The correct answer is the Securities Exchange Act of 1934, as this legislation was specifically designed to regulate the securities industry and create an independent agency known as the Securities and Exchange Commission (SEC). This act aimed to restore investor confidence in the capital markets following the stock market crash of 1929 and the Great Depression. The SEC was established to oversee and enforce securities laws, protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation.

The other pieces of legislation mentioned have different focuses. The Financial Stability Act of 2008 primarily aimed at addressing risks and vulnerabilities in the financial system in response to the 2008 financial crisis, without establishing the SEC. The Investment Advisors Act of 1940 regulates investment advisors but does not create the SEC; instead, it complements the securities regulation framework. The Dodd-Frank Act, enacted in 2010, aimed to reform financial regulation after the 2008 crisis and introduced additional consumer protection measures, but it does not pertain to the original establishment of the SEC. Hence, the 1934 Act is significant as it marks the inception of this crucial regulatory body in the financial landscape.