Vital Characteristics of Financial and Securities Regulation
What does financial and securities regulation entail? A regulated institution or facility must carry out its activities according to the set rules and services. Regulation of institutions is done by a central authority. It is vital that institutions are regulated to avoid chaos.
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. 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? Financial and securities regulations is a branch of financial law. Different jurisdictions have varying financial regulators. Financial regulators can be government based or non-government based. The United States financial and securities market is regulated by different authorities including the SEC, CFTC, among others. Different countries are regulated by varying industry regulators.
There are many players in 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. You should fully understand all the regulations of the Securities Act of 1933 in the United States. 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 in the United States is also regulated by the Securities Exchange Act of 1934. The Securities Exchange Act of 1934 gives the SEC powers to perform various activities. Debt securities are regulated by the Trust Indenture Act of 1939. There are many other laws that regulate the financial and securities market in the United States.