As a financial professional, it is important to know who the major financial regulators are and what they do. The Series 7 exam will test your knowledge of these regulators and the role they play in our economy. In this blog post, we will provide an overview of the Department of the Treasury/IRS, state regulators, the Federal Reserve, SIPC, and FDIC. We will also discuss what each regulator is responsible for and how they work together to protect investors and maintain financial stability.
The Department of the Treasury/IRS is one of the major financial regulators in the United States. This department is responsible for monitoring and enforcing financial regulations across a variety of sectors, including banking, securities, insurance, and taxation. The IRS is responsible for enforcing financial tax laws and ensuring that taxpayers are paying their fair share. The Department of the Treasury helps maintain financial stability by working closely with other federal agencies, such as the Federal Reserve and SIPC.
State regulators are another important player in the financial regulatory landscape. These agencies are responsible for overseeing and enforcing state-level laws and regulations related to securities trading and investment. Some examples of state regulators include the National Association of Securities Administrators (NASAA) and individual state securities commissions. The NASAA, in particular, works closely with the SIPC and the SEC to ensure that investors are protected from fraud and other financial crimes. State securities commissions also commonly work with the SIPC and FDIC to help protect investors.
The Federal Reserve is perhaps one of the most well-known financial regulators in the US. As part of its mission to promote financial stability and protect investors, this agency regulates large banks, oversees monetary policy decisions, monitors economic trends and conditions, and provides various financial services to banks and other institutions. For example, the Federal Reserve uses its regulatory authority to ensure that banks are following safe and sound lending practices, while also providing support during financial crises.
The Securities Investor Protection Corporation (SIPC) is a non-profit organization that serves as the primary federal agency responsible for protecting the investments of individual investors. SIPC does this by providing insurance coverage for customer accounts in the event that a brokerage firm fails. SIPC works closely with other major financial regulators, such as the SEC and FINRA, to ensure that investors are protected from fraud and abuse.
Finally, the Federal Deposit Insurance Corporation (FDIC) is another key player in US financial regulation. This government agency is responsible for overseeing and regulating private commercial banks, ensuring that they are financially stable and adhering to regulatory standards. Like SIPC, the FDIC works closely with other major financial regulators to help promote investor protection and maintain economic stability.
If you are studying this information for the Series 7 exam, know that these as well as many other topics will be covered on the exam. Achievable offers comprehensive Series 7 practice exam FINRA to prepare you for the Series 7 Exam. Good luck on your studies.