MUTUAL FUND ASSOCIATION OF TRINIDAD AND TOBAGO
"STRENGTHENING THE ENVIRONMENT FOR INVESTOR CONFIDENCE"

Importance of Financial Regulation in the Securities Industry

An English poet, John Donne famously wrote that “no man is an island.” An old adage which can also speak to the interconnectedness of financial markets and how their actions impact the global economy. The global financial crisis of 2007 – 2008 (“the financial crisis”) serves as a stark reminder of the domino effect of the downturn in major financial markets on other economies. Inadequate regulation and supervision in global financial markets and banking systems are one of the main causes of the financial downfall. More than ten (10) years later, regulators worldwide continue to explore the lessons learnt from the financial crisis and have since implemented financial regulatory reforms to lessen the likelihood of the recurrence of such a colossal economic downturn. Adequate and appropriate regulation is critical to mitigate market failures. Through financial regulation, the Trinidad and Tobago Securities and Exchange Commission (“TTSEC”), with the cooperation of other local regulators, aim to mitigate systemic risk. This week’s article explores the meaning of financial sector regulation and its importance to the proper functioning of the securities market.

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