Question

In almost all industries, regulation is put in place to protect consumers. The case for the regulation of financial services and markets is no different, and in fact, maybe even stronger as no tangible product is actually purchased. Discuss this statement?

Answer 1

Financial markets are placing a lot of importance on the protection of the interest of the various market participants because all the market participants and the share holders are of the utmost importance at they are representing the the society who is investing into the economy and believing in the story of economy so there is a need for protection of the interest of the stakeholders who are investing into the securities and hence their need to be a proper regulation in place in order to manage their interest by placing of appropriate regulation which will continuously require various companies to disclose material information which will be required in order to protect the interest of public.

The regulation in financial market had been subject to various modifications after various types of frauds has been discovered by the regulatory authorities on a continuous basis and they are trying to update their regulation system in order to continue protecting the interests of the stakeholders because when there is a intangible nature of transaction which is taking place there is a very high need for placing of appropriate authority in order to protect the interest of the market participants and hence institutions like security and exchange commission has placed various important regulations in order to manage with the disclosure norms and protect the interest of various stakeholders in form of protection of insider trading and imposition of various types of penalties to those who are engaging into manipulation of the stock market and hence it is trying to protect the interest of the shareholders and the stakeholders and making and believe about the integrity of the markets.