The Role of the Regulators

Government regulators act as watchdogs, overseeing trading in the securities or futures industries. Although industry officials sometimes complain about too much oversight and regulators sometimes claim the industry isn’t providing enough, the check-and-balance tension between them helps to guard the public interest and maintain a level trading field for all investors and traders. Nearly everyone can agree that a balance of regulation is a good thing because its existence gives the public comfort and confidence that an outside source is guarding their interests.

In addition to providing or approving market regulations, the regulators also provide traders and consumers with valuable details about the status of brokers and firms, warnings about investment scams, advice on how to invest and other useful information. Their enforcement actions or threats of action reduce the negative aspects of the industry and help to keep it as "clean" as possible.

Regulators on the equities side include the Securities and Exchange Commission (SEC), www.sec.gov; Federal Reserve, which controls margin requirements, and the National Association of Securities Dealers (NASD), www.nasd.com. Regulators for the futures industry include the Commodity Futures Trading Commission (CFTC), www.cftc.gov, and the National Futures Association (NFA), www.nfa.futures.org. Generally, persons who handle your money must be registered with a regulatory agency.

The Securities Industry Association (SIA) and the Futures Industry Association (FIA), www.fiafii.org, are the national trade organization for these types of trading instruments. 

1. What Is a Good Trading Instrument?
2. Trading Equities
3. Trading Futures
4. The Role of an Exchange
5. The Role of the Brokerage Firm
6. The Role of the Regulator
7. How to Pick a Broker
8. How to Place Orders

Main Trading Resources Section