🔹 Definition
A Regulatory Agency is a governmental or statutory authority established to oversee, supervise, and enforce laws and regulations within a specific industry or jurisdiction. In the context of financial services, AML/CFT compliance, data protection, and corporate governance, regulatory agencies play a critical role in maintaining market integrity, protecting stakeholders, and mitigating systemic risk.
These agencies typically have powers to license, inspect, investigate, impose penalties, and issue guidance or binding rules.
🔹 Frequently Asked Questions (FAQs)
Q1: What are examples of regulatory agencies by region?
- Singapore:
- Monetary Authority of Singapore (MAS) – oversees financial institutions, AML/CFT
- Accounting and Corporate Regulatory Authority (ACRA) – regulates companies and corporate service providers
- United States:
- Securities and Exchange Commission (SEC) – securities markets
- Financial Crimes Enforcement Network (FinCEN) – AML regulations
- Federal Trade Commission (FTC) – consumer protection
- European Union:
- European Central Bank (ECB) – monetary policy
- European Securities and Markets Authority (ESMA) – financial markets
- Data Protection Authorities (DPAs) – GDPR enforcement
- United Kingdom:
- Financial Conduct Authority (FCA)
- HM Revenue & Customs (HMRC) – tax and money laundering oversight
Q2: What are the main functions of a regulatory agency?
- Licensing and supervision of individuals and firms
- Developing and enforcing regulations in alignment with national and international standards (e.g., FATF)
- Conducting audits and inspections to ensure compliance
- Imposing administrative penalties and sanctions for violations
- Issuing guidance, consultation papers, and best practice frameworks
- Collaborating on cross-border investigations and regulatory cooperation
Q3: What types of entities are typically subject to regulatory oversight?
- Financial institutions (banks, fintechs, insurers, MSBs)
- Corporate service providers (e.g., CSPs, RFAs)
- Capital markets firms (brokers, asset managers)
- Digital asset service providers (VASPs/CASPs)
- Trusts and foundations, particularly in offshore jurisdictions
- Professionals (e.g., accountants, lawyers) under AML obligations
Q4: What’s the relationship between regulatory agencies and AML/CFT?
- Agencies issue national AML/CFT regulations based on FATF Recommendations
- They conduct risk assessments, publish typology reports, and guide institutions in applying risk-based approaches
- Regulators have the power to inspect KYC/CDD processes, review transaction monitoring systems, and evaluate STR filings
Q5: How should businesses interact with regulatory agencies?
- Ensure timely registration or licensing as required
- Maintain open communication and disclosure in case of issues or breaches
- Respond promptly to inquiries, inspections, or remediation orders
- Stay updated on regulatory developments and updates
- Integrate regulatory guidelines into internal policies, training, and audit frameworks
