Regulatory Portfolio

ID Number: 400008793

Act: Securities Act

Country: Barbados
Financial market regulation are rules, firms within the financial system such as banks, insurance
companies, and credit unions must follow. In other words, regulations confine financial institutions to
certain requirements, restrictions and guidelines.
Regulations within the financial market comes in the form of sanctions. They are used to encourage
financial institutions to observe certain prices, supply certain goods or apply specific techniques. These
institutions are forced to publicize violations, face fines and imprisonment, and even divest or close
business operations in the event of violating the rules enforced. Sanctions are also an order to make
specific arrangements, as well as an injunction against withholding certain actions. Moreover, banks are
the most heavily regulated financial institution, as they are subject to many other forms of regulation.
Such a regulation is consumer and investor protection. These are various rules and conditions set in
place to protect consumers and investors from fraud, stop banks from aiding and abetting etc. Banks are
also regulated via prudential regulation, a means that requires banks to control financial risks and
ensure that there is sufficient liquidity to handle economic crises.
Financial regulation carries various purposes. Its overall purpose is to set and maintain a standard of
integrity within the financial system. The regulations set, help to ensure that financial institutions are
not treating investors and consumers unfairly such as raising prices while lowering quality of output.
They also help to promote a stable financial status and economy.
The Securities Act requires financial institutions to disclose relevant and accurate
information of the stock market publicly to its potential and current investors. The core function
of the disclosure agreement in financial market regulation is to eliminate manipulation and
provide economic agents with information to help them make better knowledgeable decisions. It
prevents fraud while ensuring investors are provided with accurate and transparent financial
information. This information enables investors to make well informed judgments about whether
to purchase a company’s securities. By attaining this generates potential and current investors’
confidence in the institution while maintaining the integrity and stability of the financial system.