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Financial regulation refers to the oversight and enforcement of rules designed to maintain the integrity, stability, and fairness of financial markets and institutions. Regulatory bodies, such as the Securities and Exchange Commission (SEC) in the U.S., create guidelines to protect investors, prevent fraud, and ensure transparency. Regulations cover areas like trading practices, financial disclosures, risk management, and consumer protection, aiming to minimize systemic risks.
The Dodd-Frank Act, enacted after the 2007-2008 financial crisis, introduced stricter regulations on banks and financial institutions to prevent excessive risk-taking and enhance market transparency.
• Ensures stability, transparency, and fairness in financial markets.
• Enforced by regulatory bodies like the SEC, FCA, and others.
• Covers trading practices, financial disclosures, and risk management.
It enforces transparency, reduces fraud, and ensures fair trading practices.
Compliance can be costly and complex, affecting operational efficiency.
They reduce systemic risks by enforcing sound financial practices and risk management.
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