Importance of Financial Regulation

As any other sector finance has to be regulated as well.

Financial Regulation is a form of regulation or supervision, which subjects financial institutions to certain requirements, restrictions and guidelines, aiming to maintain financial integrity. This may be handled by government or non-government organization.

Financial regulation sets out some aims:

To prosecute cases where there has been a market misconduct
To enforce applicable laws
To protect clients, and investigate complaints
To maintain confidence in the financial system
To license providers of financial services

Further as an example, there is a need to look at the major regulator. The Financial Services Authority (FSA) is an independent organisation responsible for regulating financial services in the UK. The FSA's aim is to promote efficient, orderly and fair financial markets and help retail financial service consumers get a fair deal. The FSA was set up by government. The government is responsible for the overall scope of the FSA's regulatory activities and for its powers. The FSA regulates most financial services markets, exchanges and firms. It sets the standards that they must meet and can take action against firms if they fail to meet the required standards. The Financial Services and Markets Act give FSA four statutory objectives:

Market confidence
Public awareness
Consumer protection
The reduction of financial crime

Sources:

www.fsa.gov.uk

By Rima Ziaugaite