Introduction A business must understand how regulatory law impacts its business,

Question

Introduction
A business must understand how regulatory law impacts its business, even when the law has no specific connection to its products.

Initial Post Instructions
In January, 2010, the Securities and Exchange Commission (SEC) voted to provide public companies with interpretive guidance on SEC disclosure requirements as they apply to business or legal developments related to climate change. Find out what advice the SEC has given. What impact would you expect this requirement to have on the various corporate players (CEOs, Boards of Trustees, etc.)?

Requirements

Initial Post Length: minimum of 350 words.. ORIGINAL WORDS, NO Copy and paste

Explanation / Answer

In 1934 US Securities and Exchange Commission (SEC) created by Congress as federal regulator of securities markets is an independent government agency accountable to protect investors, preserve fair and orderly functioning of security markets and assist in capital formation.

Furthermore it also necessitates public companies to ensure that they appropriately oblige with the disclosure norms for public, protect investors from fraudulent and manipulative practices in the market and effectively scrutinizes corporate takeovers in US.

US refer to federation of States each having its own government structure and regulatory scheme. Whereas national government has regulatory authority over inter-state commerce, foreign trade and other business activities of national scope and interest whereas each state have its own rules and regulations applicable to organizations functioning within its territory.

Furthermore there are local jurisdictions such as counties, municipalities and other local political units which might have regulatory authorities on matters such as land-use, zoning, permitting, building codes, sanitation etc. Thus in US the regulatory schemes applicable to business operations depends on how the business is organized, where and how it operates and kind of industry it operates.

In US healthcare and financial services are the two major sectors that are presently most affected by the regulatory environment as there are a number of regulatory mandates which these industries need to comply with which in fact are aimed towards effective regulation, transparency and reducing overall market risk.

However new regulations are costly in terms of compliance as organizations need to transform data tracking and gathering systems, reporting functions and organizational structures. Furthermore these regulations to a certain extent can also limit revenue growth and profitability for instance complying with increasing the capital ratio requirements, limiting operation of certain products and services etc.

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