Financial Regulation

The intent of regulation in financial markets is to create orderly and fair conditions so that market participants can be relatively assured of an equal playing field.

Chief regulators in the U.S. include the federal government and its sponsored agencies, corporations that run exchanges (i.e. NYSE, Nasdaq), and agencies like the Federal Reserve, SEC, and CFTC.

The Federal Reserve is the U.S. central bank. It exerts a massive level of control of financial markets by setting interest rates via the fed funds and discount rate, reserve requirements of banks, controlling the money supply through open market operations, and other activities.

The Commodity Futures Trading Commission (CFTC) is charged with regulating futures and options markets in the U.S. Their responsibilities include ensuring against market manipulation to provide for more efficient commodity and futures markets.

The Securities and Exchange Commission (SEC) is designated the primary protectorate of investors, regulating the issuance and reporting standards of publicly traded firms. The SEC can punish offenders and has oversight authority over exchanges.

Financial Regulation - Article By Better Trades