Regulatory Bodies Checkpoint Basically, a regulatory body is a tiered system put in place to protect investors and banks from cons and scams. It helps to prevent fraud and punishes offenders for things such as insider trading. At the top of this regulatory structure is the United States Congress which is itself the in charge of the SEC or Securities Exchange Commission, this body puts regulations and laws in place which banks, brokers, investors and the Marketplace must abide by, it also oversees all operations and releases quarterly and annual reports on the health and direction of the market and economy.
Next is the NASD or the National Association of Securities Dealers, this is the body that makes policy for the industry i. e. , stockbrokers and industry professionals must abide by and comply with. Last is regulation on the state level is the state security regulators which also handles complaints and enforces laws and finally the individual brokers and investors. The market is set up is a buyer beware system, though there is a fair amount of safety measures in place.
Individuals should maintain an air of personal responsibility when investing and educate themselves; this is the biggest regulatory safety practice of them all. The laws are mainly in place to protect the banks not the individual. It is important to have these institutional organizations in place to keep the market honest or else it could be a free for all. Though I have learned that investing in stocks and bonds is a risky business and should not be a hobby for the inexperienced, much money can be lost in the blink of an eye and only money that one can afford to lose should be invested.