Financial Regulation Assignment Help

Financial regulation is a form of regulation, which forms the rules for the financial institutions to meet the financial or any other requirements, limitations, and instructions, aiming to maintain the integrity of the financial system decided by the regulatory body. Financial regulation can be handled either by a government organization or a non-government organization. Financial regulation acts as the supervisor of financial markets and the institutions. For example, Financial Services Authority (FSA) in the United Kingdom (UK) is the governing body for the financial regulation of the country.

Regulation is required to promote a stable economic structure of the country in order to prevent the price and output changes which can lead to financial crisis. The rules are formed to protect the investors, to maintain the orderly markets and promote the financial stability. The wide range of regulatory activities includes setting the minimum standards for the capital investments, conduct regular inspections and investigating and prospecting misconduct.

The main purpose of the financial regulation are:

• To maintain the laws in the financial market so that the markets work efficiently, like in India we have Securities Board of Exchange (SEBI) for the stock market.
• To make laws and orders in the financial system to maintain the financial stability of the economy. • Giving the appropriate protection for the consumers' investments.
• To reduce the extent to which a regulated business can be used for a purpose connected with financial crime.
• Income is to be redistributed in accordance with the social objectives for the economic growth of the country.

The structure of the Supervision authority:

There are various steps in place for the financial regulatory structure around the globe, there are a number of different authorities or regulatory bodies which overlook the different financial bodies. Some of them are:

• Supervision of Stock exchanges: Like for India, it is supervised by Securities Exchange Board of India (SEBI).
• Supervision of Listed companies.
• Supervision of anti-money laundering • Supervision of Investment management: like in India, for investments in Insurance, it is regulated by IRDA.
• Supervision of Banking industry and Non-Banking Financial Services (NBFC) providers: like in India, Reserve Bank of India is the regulatory body for the banking sector.

The goal of the financial regulation or capital regulation is to make losses internally, thereby protecting the deposit insurance funds and mitigating the moral hazard.