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Financial regulator is a government or non-government body that regulates the financial activities of companies under its jurisdiction.
In general, there are different tasks of financial regulators, depending on the direction. Some can control the sphere of securities trading, others control banking activities, others control the Forex market, and so on. We will consider the general principles of the activity of financial regulators.
How is the process of interaction with the financial regulator going? The company approaches him with a desire to obtain a license. A license is something like an approval for doing business. To obtain it, the company must fulfill a number of requirements. These requirements vary by regulator. That is why many financial market participants respect some regulators, but not others. There are regulators that can be licensed simply by paying a couple of thousand dollars. And there are those who are really strict about their activities.
So, the company fulfills all the requirements:
· Tweaks the rules for passing the AML and KYC procedures;
· Tweaks algorithms that check the suspiciousness of transactions;
· Shows its financial solvency;
· And so on.
In other words, it does everything to meet the requirements of the regulator.
Further, the company conducts its activities and at the same time constantly reports to the regulator about it. Provides information about their bank accounts, shows transactions and so on. If it violates the rules, the regulator notifies about it with the requirement to comply with everything. If the company does not comply, the license is revoked.
Thus, if a company is regulated by one or better when several well-known and strict regulators, this indicates reliability. This means that it meets all modern standards and will not deceive customers.
How do you know if a company is regulated? Often on the site they themselves write about it, but you can write anything. To check, you need to visit the official website of the regulator and see if the company you are interested in has a license.
The regulator performs another function. If the client, in his opinion, was treated unfairly, he can turn to the regulator and complain. That is why it is recommended to work with companies that are regulated in your country. In Russia, the financial regulator is the Central Bank of the country. And it doesn't matter if it's a Russian company or a foreign one. If it is regulated by the Central Bank of the Russian Federation, then it reports to the regulator, providing all the necessary information. And you can safely turn to the Central Bank with a complaint that the company performed its duties poorly (for example, it did not transfer money to you).
Next are two options:
· Either the Central Bank turns to it with a demand to fulfill the terms of the contract and the company does;
· Either the company does not comply and loses the license of the Central Bank.
Obviously, it is easier for her to follow the first path, so as not to lose the lion's share of the Russian market. Because if you lose a license, a lot of customers will leave immediately.
What if the regulator is Western? Even if he is super strict and cool, it will be more difficult to work in this case. Firstly, just to contact him you need to know at least English, and written. But this is also possible.
But still, more often than not, customers complain only about the fact that the company is regulated, which means that there will be no problems.
In addition, regulators have other functions. For example, educational. They can launch various programs to increase the financial literacy of their citizens. Or conduct various studies, surveys.
• Certification Webinars
• Certification Examinations
• List of Passers
• CMP Notice
• Asset Valuer
• Credit Rating Agencies
• Inclusion in the List of External Auditors and Auditing Firm
• Complex Request for Opinion and/or Clarification on Accounting Matters
• Highly Technical Request for Opinion and/or Clarification on Accounting Matters
• Simple Request for Opinion and/or Clarification on Accounting Matters
• Request for Exemptive Relief
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