Essential Aspects of Financial and Securities Regulation
What do you understand by the concept of financial and securities regulation? Regulation is made up of rules that must be followed, restrictions that must be adhered to, as well as guidelines to carry out certain things. 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.
The are various reasons why the financial and securities industry needs to be regulated. When the financial and securities industry is regulated well, instability will be avoided. It is good for you to know that the financial and securities industry will have honest and ethical systems if there are strict guidelines to follow. 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. It is good for you to know that the regulation of the financial industry is important to shield consumers from industry manipulation.
Who is responsible for the regulation of the securities and financial industry? The regulation of financial and securities industry falls under financial law. Different jurisdictions have varying financial regulators. Financial regulations can be dependent or independent from government supervision. The United States financial and securities market is regulated by different authorities including the SEC, CFTC, among others. You will find different financial and securities regulators in different countries.
Financial and securities institutions include stock exchange companies, investment organizations, banks, financial service providers, among others. It is good for you to know what constitutes the securities industry. Other financial instruments include insurance products.
There are a number of laws that are applied in the regulation of the financial and securities industry. All countries have set rules that govern financial affairs in the country. 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. The main aim of the Securities Act of 1933 is to make all the financial securities information available. This act is also applied to avoid fraud and deceit in the securities market of the United States.
The other law applied in the United States securities market is 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. Debt securities are regulated by the Trust Indenture Act of 1939. 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.