Essential Aspects of Financial and Securities Regulation
What do you understand by the concept of financial and securities regulation? Regulations set out the manner in which things must be done. There is usually a central facility that makes sure all the institutions that fall in a certain category follow the set guidelines. Regulations are necessary to bring order in certain operations.
It is vital that the financial and securities market is regulated. When the financial and securities industry is regulated well, instability will be avoided. Regulations promotes integrity as well. The importance of financial and securities regulation ensures that financial institutions can easily expand their financial products. There will also be enhanced confidence in financial institutions if there is a good regulatory authority in the financial and securities market. Financial and securities markets must be regulated to ensure that consumers are not manipulated by the available systems.
It is good for you to understand who regulates financial and securities market? The regulation of financial and securities industry falls under financial law. Nations have their own financial regulating authorities. Financial regulation authority can be government or non-government institutions. There are different financial regulators in the United States. Other countries have their own financial regulators, for example, the UK has the BoE, PRA, and the FCA, Japan has FSA, Germany has the FFSA, France has the AMF, China has the CBRC, CIRC, and CSRC, among other regulators.
Which industry players come to mind when you think about the financial and securities industry? Financial securities include derivatives, debt securities, and equity securities. Other financial instruments include insurance products.
It is vital that you understand which laws are applicable in the financial market. Nations have their own financial laws. The United States financial and securities market is regulated by a number of financial laws. One of the commonly applied laws in the USA is the Securities Act of 1933. This act is used to make sure that all the stakeholders get all the information about securities that are on public sale. The other objective of this act is the prevention of fraud involved in the trading of financial securities in the United States.
The securities market in the USA is also regulated by the Securities Exchange Act of 1934. This law ensures that the SEC has the powers to discipline, register, regulate, get periodic financial reporting information, among others. The other law is the Trust Indenture Act of 1939 which regulates debt securities. Other laws applicable in the United States are the Investment Company Act of 1940, Jumpstart Our Business Startups Act of 2012, Sarbanes-Oxley Act of 2002, Investment Advisers Act of 1940, and the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.