Essential Aspects of Financial and Securities Regulation
What does financial and securities regulation entail? 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. Regulation of institutions is done by a central authority. Regulation is crucial if order has to be maintained in carrying out various operations in a certain industry.
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. Regulations promotes integrity as well. Industry players will be able to increase the number of products they deal with if there is proper regulation in the financial and securities industry. The regulation of financial and securities markets ensures that that clients do not lose confidence in the operation of financial institutions. 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? You will understand financial and securities regulation if you study financial law. Different countries have different financial regulators. Financial regulations can be dependent or independent from government supervision. The financial regulatory authorities in the United States include the SEC (Securities and Exchange Commission), FINRA, CFTC, FDIC, OCC, NCUA, and the CFPB. 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.
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. It is good for you to know that the financial market has many products.
It is vital that you understand which laws are applicable in the financial market. All countries have set rules that govern financial affairs in the country. There are a number of laws that govern the securities market in the United States. 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. The Securities Act of 1933 was made to avoid fraud and other malicious activities when selling financial securities.
The other law applied in the United States securities market is the Securities Exchange Act of 1934. This act gives the Securities Exchange Commission the mandate to govern various aspects of the securities market. You should know that the debt securities laws are found in the Trust Indenture Act of 1939. There are many other laws that regulate the financial and securities market in the United States.