Question

Define the roles of the securities industry regulators. How does the Federal Reserve Board impact the securities markets

Answer 1

The major role of the security industry regulators is to enforce regulations for various sections of self-regulatory bodies, created to oversee the work of various entities. Those that come under the roles and responsiblity of these regulatirs include public utility companies, stockbrokers, investment advisers and companies, as well as publicly held companies.

As far as the impact of Federal Reserve is concerned, the Fed comes in rescue when the security market needs to be regulated through government intervention. The Fed sells its government securities to both the individuals and institutions, which decreases the amount of money left for commercial banks to lend. This increases the cost of borrowing and raises interest rates, including the federal funds rate. The regulation of various monetary rates is handled by the Fed inorder to maintain the financial market of the state.