A Guide to Financial and Securities Regulations
It is important to have integrity in trading and this is the reason why there are rules and regulations set up for them to adhere to. Those in the financial sector including banks, the stock exchange and lending institutions, take these regulations n a serious manner. The main beneficiary of these rules and regulations are the clients of these financial institutions. The goal of these rules and regulations is not focused on the client per se, but in giving them an improved environment to operate. It aims at the improvement of the overall performance of the financial and securities sector. In most cases, the government is tasked to oversee that these rules and regulations are implemented. But there are some places where this task of overseeing that the financial sector complies with these rules and regulations are given to non-government organizations.
Client of these finance and securities firms need to have a good knowledge of the rules and regulations and how they work. You will find a few major objectives that summarizes these rules and regulations. And as a client of these institutions, you may want to know what these regulations are, what they cover, and how they enable you to do good business with these firms. Here are the major headings or objective of having financial and securities regulations.
The first major objective of finance and securities regulations is to help clients build trust in them. Money is the most important possession of these clients. It is, therefore, important that they trust banks and other lending institutions with their money. And this is why the rules and regulations laid out for financial intuitions are very strict. Before banks and securities firms are allowed to operate, they need to pass several integrity tests.
The second major objective of these rules and regulations is for the stability of the finance and securities market. A banking business is just like any other business that can fold up if not handled well. Clients and the economy will be destabilized if this takes place. Since these eventualities are covered in the rules and regulations, then there is really no need to fear. It is important that financial institutions report any new thing that they want to implement. This new development that they want to implement will not be allowed if it will lead to disruption of the whole financial sector. These types of measure help to stabilize the financial sector.
The protection of the client is the third main objective of these financial and securities regulations. When clients deal with financial and securities firms, they are put at risk. Some risks a client is faced with is getting high interest rates for loans and very low interest rates on savings. These rules and regulations have set limits or boundaries that institutions cannot go beyond.