Importance of Financial Regulations and Compliance

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Almost everyday we find ourselves talking about money and its uses, most of the time we are found discussing about these financial institutions that come out to provide us with the best services we require. In this post, I will be talking about the rules and regulations that helps to keep these financial bodies or markets safe and secure for investors or their customers. This is where the topic Financial Regulation and Compliance comes in, I will be explaining further what these simple terms mean.

When it comes to financial regulation, it simply refers to the rules or laws that financial institutions abide by or governs the markets in order to protect customers from scams/frauds, misconduct and help provide a safe environment for clients or customers. As always said, rules or laws are always meant to be obeyed and this is why there is a sense for compliance for these laws. Compliance is simply a way of making sure that financial institutions or markets and their customers abide by the financial rules and laws in order to promote a good relationship between customers and institutions.

There are several benefits that comes from financial regulations and compliance, one of which is that it promotes sustainability in the market or institutions. With the help of these two in place, the markets and institutions are able to provide a secure base for their customers or investors and thereby protecting them from any harm which may be caused by scams or other fraudulent activities. It also aims to ensure a very transparent platform for consumers and overall, the accountability of financial institutions or markets.

Requirements on both parties to adhere to these regulations is to prevent financial institutions or customers from attracting any form of fine and further legal actions. There are also certain measures that are put in place in order to ensure that financial institutions comply with these regulations and ultimately avoid them from being inflicted with a penalty.

An example of financial regulation in Ghana is the Banking Act, 2004 (Act 673) which regulates the operations of banks and other financial institutions in the country. The Banking Act provides a framework for the licensing, establishment, and supervision of banks, and sets out the minimum capital requirements for banks.
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I hope this post become useful in any form, but generally I believe that these regulations are put in place to keep us from any financial harm or crisis. And it is no surprise that everywhere we find ourselves, there are rules and regulations that governs us. This helps keep the peace and stability in our society.
Thank you for reading this post, I hope to see you on the next one. Bye :)