How governmental regulations are affecting financial activities in an area depend upon the level they are working. If these regulations are strict, it will take more time to comply with them and will increase the burden on people. On the other hand, if these regulations are not that much strict, companies will easily comply with them and will work faster.
On the other hand, these strict regulations will help the individuals in the long term although it may seem difficult to observe them in the start.
Sarbanes-Oxley Act has been introduced so that companies do not commit frauds and money of investors is in safe hands. Environmental Protection Agency (EPA) is also another regulatory body that helps the end user when it regulates the companies to use such products that are environmental friendly and ask companies to use upgraded machinery that does not pollute the environment. But as the machinery is updated, costs are increased that customers need to bear at the end.
Another type of regulation has been introduced in the form of Security and Exchange Commission (SECP) so that security market can be regulated and people can invest their money without any hesitation.
If the regulations are not that much strict, companies may play foul and end customer is hurt. But if these regulations are too much strict, procedures are elongated, time for processing is increased and ultimately costs are increased that also effects the end customer. So, finance regulations online making and implementation requires a lot of careful planning as it is difficult to estimate how it will impact.
Sometimes, it happens that a crisis occurs and regulators feel the need of a regulation that if previously existed, could stop this crisis. So, regulation making needs a lot of attention. If a policy is already in place and working, it will protect the investment of end users and the overall system whose absence can create a lot of problems.
Each sector has its own set of regulations that monitor the working of that particular sector. Like banking industry is governed by some of its own regulations, for example, Housing and Economic Recovery Act, 2008 is there to prevent home foreclosures by providing proper counseling to the borrowers.
As individuals are ultimately effected by these regulations, it is very important for them to understand these finance regulations online. Only then, they can invest or borrow properly.