Stock Market Regulatory & Compliance Definitions

Anti-Money Laundering (AML) refers to regulations, policies, and procedures designed to prevent criminals from disguising illegal funds as legitimate income. Financial institutions must implement AML measures to detect and report suspicious transactions, ensuring transparency and compliance.

Compliance Requirements are rules, regulations, and standards that financial entities must adhere to in order to operate legally. These include AML, KYC, reporting standards, and licensing requirements enforced by regulatory bodies to maintain market integrity and protect investors.

Insider Trading is the illegal act of buying or selling securities based on material, non-public information. It gives an unfair advantage and undermines market integrity. Regulatory bodies impose strict penalties to deter insider trading and maintain transparency.

Know Your Customer (KYC) is a process used by financial institutions to verify the identity of their clients. It involves collecting personal information, identification documents, and assessing potential risks. KYC is essential for compliance with AML regulations and fraud prevention.

Market Manipulation involves artificially influencing the price or volume of a financial instrument to mislead investors. Common tactics include pump-and-dump schemes, spoofing, and wash trading. Regulatory bodies monitor and penalize manipulative practices to maintain fair markets.

Regulatory Bodies are government agencies responsible for overseeing and enforcing financial market rules. Examples include the SEC (U.S.), ASIC (Australia), and FCA (U.K.). They protect investors, ensure market transparency, and enforce compliance with legal standards.

Reporting Standards are guidelines that dictate how financial entities must disclose their financial performance, trading activities, and compliance measures. Accurate reporting helps ensure transparency, accountability, and adherence to regulatory requirements.