Over the last 100 years, the United States equities and bond markets have evolved to include more regulation. Major events happen to cause investors to lose faith in the marketplace. It is during the bad times that congress takes action to restore faith in the markets. So we are told; however, there are always two sides to every story.

There are two things to consider about with regulations. Business professionals believe that over-regulation kills business productivity. They have good reasons to think this way; On the other hand, without regulation, businesses have gone rouge. Greed and bad ethics can cause the economy to have a meltdown. In our opinion, there is a fine line between too much regulation and too little. Regulations help one party and handicap another.

The Good

In our opinion, there is a fine line between too much regulation and too little. One reason why business regulation is good it to keep major players in the cooperate community ethical. There will always be the temptation of greed or fraud from company executives. Many of these laws give congress and the judicial system the power to prosecute leaders that have no concern for the public or their shareholders.

The Bad

The bad from over regulation is that it hurts profits of companies. We don’t believe for profit is a dirty word. Companies must have a profit incentive to continue growing in our economy. No profit means that a company is probably going to shrink. That means fewer jobs, less money circulating into the economy, and less shareholder growth.

Important distinctions

United States Agencies

An agency is appointed by congress to regulate something specific. These are independent regulatory systems that have regulatory power.

United States Acts

Congress passes acts that affect business regulation. Like we said earlier, these are passed with an intent to help agencies regulate unethical behavior.

Investor Related Laws and Agencies

  1. SEC (Security Exchange Commissions)
  2. IRS (Internal Revenue Services)
  3. FASB (Federal Accounting Standards Board)
  4. SOX (Sarbanes-Oxley Act of 2002)
  5. Foreign Corrupt act of 1973