Financial Regulation

Financial regulation is a form of regulation or supervision, which subjects financial institutions and companies active on the financial markets (i.e. listed companies) to certain requirements, restrictions and guidelines, aiming to maintain the integrity of the financial system.This may be handled by either a government or non-government organisation.

Aims of regulation

The objectives of financial regulators usually include:

  • maintaining market confidence in the financial system
  • contributing to the protection and stability of the financial system
  • securing the appropriate degree of consumer protection
  • reducing the extent to which regulated businesses can be used for financial crime purposes.


There may be one of more regulatory authorities active in various jurisdictions.

Financial regulation for the Netherlands is in the hands of the Netherlands Authority for the Financial Markets (Autoriteit Financiële Markten) or AFM, see:

In the United States of America, the two probably best known financial regulators are the U.S. Securities and Exchange Commission (SEC) and the Federal Reserve System ("Fed").

Supervision of listed companies

Financial regulators ensure that listed companies and market participants comply with various regulations under the trading acts. The trading acts demand that listed companies publish regular financial reports, ad hoc notifications or directors' dealings.

The objective of monitoring whether listed companies comply with disclosure requirements is to ensure that all investors have equal access to essential and adequate information in order to make a well founded value and trading assessment of listed companies and their securities.

Supervision of stock exchanges and of financial services providers

Exchange acts ensure that trading on the exchanges is conducted in a proper manner. This may refer to pricing processes, trade, execution, settlement and efficient trade monitoring.

Banking acts lay down rules for banks which they have to observe. These acts are designed to prevent potentially system disrupting developments, thus ensuring a strong and efficient banking system.

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