Regulation & Compliance
40 Regulation & Compliance terms, defined in plain English — part of the 1345-term Finicade finance glossary. Each one has its own page, and links to the free game that teaches it.
- 13F Filing
- A 13F discloses the US equity holdings of institutional managers with over $100m, filed quarterly within 45 days of quarter end.
- Accredited Investor
- An accredited investor meets income or net worth thresholds — $200,000 income or $1m net worth in the US — and can buy unregistered private offerings.
- Arbitration Clause
- An arbitration clause requires disputes to go to private arbitration rather than court, usually paired with a waiver of class actions.
- CFTC
- The CFTC regulates US derivatives markets — futures, options on futures, and most swaps after Dodd-Frank extended its reach.
- Class Action
- A class action lets one lawsuit represent many people with the same claim, making small individual harms economically worth litigating.
- Consumer Financial Protection Bureau
- The CFPB was created by Dodd-Frank to consolidate consumer protection across mortgages, cards, student loans, debt collection and credit reporting.
- Cooling-Off Period
- A cooling-off period gives a consumer a fixed window to cancel a contract without penalty — three days on some US home loans, fourteen in much of the EU.
- Dodd-Frank Act
- Dodd-Frank was the 2010 US response to the financial crisis: central clearing, the Volcker Rule, living wills, stress testing and the CFPB.
- Enforcement Action
- An enforcement action is a regulator formal proceeding against a firm or individual, usually settled by consent order with a fine and undertakings.
- Equity Crowdfunding
- Equity crowdfunding lets ordinary investors buy shares in early-stage private companies through a registered portal, with limits scaled to income.
- Fair Credit Reporting Act
- The Fair Credit Reporting Act governs what credit bureaus may hold, who may access it, and how errors are corrected.
- FCA
- The FCA regulates conduct across UK financial services, with the Prudential Regulation Authority handling bank and insurer solvency separately.
- FINRA
- FINRA is the self-regulatory body overseeing US broker-dealers and their registered representatives, operating under SEC supervision.
- Form ADV
- Form ADV is the registration and disclosure document every US investment adviser files, with Part 2 written in plain English for clients.
- Glass-Steagall Act
- Glass-Steagall separated commercial from investment banking in 1933 and created federal deposit insurance.
- Insider Filings
- Insider filings report purchases and sales by a company's officers, directors and large shareholders, due within two business days on Form 4.
- Living Will
- A living will is a large bank's own plan for how it could be wound down in bankruptcy without taxpayer support or systemic disruption.
- MiFID II
- MiFID II is the EU framework governing investment services, in force since 2018.
- Proxy Statement
- A proxy statement is the document sent before a shareholder meeting setting out the votes: directors, auditor, executive pay, shareholder proposals.
- Regulation Best Interest
- Regulation Best Interest requires US broker-dealers to act in a retail customer best interest when recommending securities — above suitability.
- Regulation D
- Regulation D is the exemption letting companies raise capital privately without SEC registration — how nearly all venture funding is actually done.
- Regulation E
- Regulation E governs consumer protections on electronic transfers — debit cards, ACH and payment apps — including error resolution and liability caps.
- Regulation NMS
- Regulation NMS links US equity venues into one national market, requiring orders to be routed to the best displayed price rather than executed worse elsewhere.
- Regulation T
- Regulation T sets the Federal Reserve initial margin requirement for US retail securities purchases at 50% — investors may borrow at most half.
- Regulatory Arbitrage
- Regulatory arbitrage is restructuring an activity to fall under lighter rules while keeping its economic substance intact.
- Regulatory Sandbox
- A regulatory sandbox lets firms test new products with real customers under supervision and relaxed requirements, with agreed safeguards and limits.
- Ring-Fencing
- Ring-fencing legally separates a bank retail deposit business from its investment banking, with separate capital, so trading losses cannot reach deposits.
- Sarbanes-Oxley Act
- Sarbanes-Oxley followed Enron in 2002, making CEOs and CFOs personally certify financial statements and auditors attest to internal controls.
- Say on Pay
- Say on pay gives shareholders a periodic vote on executive compensation, advisory in the US and binding in some other jurisdictions.
- Schedule 13D
- A Schedule 13D must be filed days after acquiring over 5% of a company with intent to influence control — the public starting gun for an activist.
- SEC
- The SEC is the US federal regulator of securities markets, created in 1934 after the Crash.
- Securities Act of 1933
- The Securities Act of 1933 governs the initial sale of securities, requiring registration and a prospectus unless an exemption applies.
- Securities Exchange Act of 1934
- The Securities Exchange Act of 1934 governs trading after issuance: it created the SEC, mandates ongoing reporting, and contains Rule 10b-5 on fraud.
- SIPC
- SIPC protects US brokerage customers if their broker fails, covering up to $500,000 in securities including $250,000 of cash.
- Solvency II
- Solvency II is the EU capital regime for insurers, requiring capital sized to survive a one-in-200-year loss over one year.
- Statute of Limitations
- A statute of limitations sets how long after an event a legal claim can be brought.
- Truth in Lending Act
- The Truth in Lending Act requires lenders to disclose credit costs in a standard form, and it is why APR exists as a comparable figure at all.
- UCITS
- UCITS is the EU framework for retail funds, imposing diversification, liquidity and leverage limits in exchange for the right to sell across the bloc.
- Uptick Rule
- The uptick rule restricted short sales to prices above the last trade, on the theory that unrestricted shorting accelerates declines.
- Volcker Rule
- The Volcker Rule bars banks with insured deposits from proprietary trading and from sponsoring hedge funds with their own capital.