Financial regulation is a kind of regulation that subjects financial institutions to specific restrictions, stipulations and guidelines. It focuses on maintaining the financial system’s integrity. The entire process is dealt with by a government or non-government organization. The primary objectives of financial regulation are often to avoid market manipulation, secure clients’ position and enquire into complaints. Financial regulation is also conducted to minimize legal violations and to ensure confidence in the financial system.
Financial regulation is done distinctly for different financial entities. It depends upon the nature of tasks performed by these bodies. Some of these institutions that come under consistent financial regulatory purview include stock exchanges, listed companies, anti-money laundering agencies, investment management companies and banks and financial services providers. The acts on financial regulation empower government and non-government organizations to control and supervise activities and perform enforcement of actions wherever applicable.