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Regulatory Framework & Financial Market Legislation (DETAILED ANSWERS) Semester 1 2024 -
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Regulatory Framework & Financial Market Legislation (DETAILED ANSWERS) Semester 1 2024 -
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8/2/24, 5:40 AMRegulatory Framework & Financial Market Legislation
Jeremiah
Terms in this set (73)
SEC Regulates stock market transparency and fairness for investors.
Stock Market Historically offers about a 7% return on long-term investments.
Inflation Erodes earnings in savings accounts, CDs, and treasuries.
FASB Sets accounting standards for public companies in the U.S.
PCAOB Regulates public auditors and was established post-Enron scandal.
GAAP Generally accepted accounting principles set by FASB.
Applies consequences for violations, ranging from administrative proceedings to
Enforcement Division
litigation.
Investment Management Division Regulates investment companies within the financial market.
Economic and Risk Analysis Division Uses data analytics across SEC divisions for informed decision-making.
Trading and Markets Division Regulates brokers and national exchanges in the stock market.
Examinations Division Analyzes data on registrants and conducts on-site examinations.
Foreign Corrupt Practices Act (FCPA) Prohibits U.S. companies from bribing foreign officials for business deals.
Dot-Com Bubble Burst 2000 market crash due to inflated Internet company valuations.
Dot-com Bubble Investors inflated stock prices despite poor financial analyses, leading to a crash.
Warren Buffett Investor who avoided dot-com stocks, emphasizing financial fundamentals.
Subprime Loans High-risk loans given to individuals with poor credit history or low income.
Sarbanes-Oxley Act (SOX) Legislation to restore public trust post-corporate scandals, impacting auditors.
Dodd-Frank Act 2010 law regulating banks and protecting consumers post-2008 crisis.
Jumpstart Our Business Startups (JOBS) Act 2012 act easing IPO rules for small businesses to access capital markets.
Emerging Growth Company Filer category with revenue under $1 billion, subject to relaxed SEC rules.
Dodd Frank Rollback 2018 easing of Dodd-Frank Act, reducing regulations on banks.
Silicon Valley Bank Failures Failures leading to calls for Dodd-Frank reform in 2023.
Housing Bubble 2005-2006 period of inflated housing prices driven by high demand.
Mortgage-Backed Securities (MBSes) Investments backed by mortgage payments, affected by foreclosures.
Too Big to Fail Companies deemed crucial to the economy, bailed out to prevent market collapse.
Financial Stability Oversight Council Agency ensuring companies don't become 'too big to fail' post-2008 crisis.
Orderly Liquidation Authority Authority to break down large companies to prevent market impact.
Counsel Ensures taxpayer dollars do not bail out certain companies.
Consumer Financial Protection Bureau Responsible for eliminating predatory mortgage-lending practices.
Disclosures Required to help consumers understand home-loan financing and commitment.
Office of Credit Ratings Established by Dodd-Frank to ensure credit-ratings agencies provide reliable ratings.
Volcker Rule Prevents banks with federal backing from engaging in risky trading activities.
Critics of Dodd-Frank Argue that it limits financial firms' growth potential and market liquidity.
Collateralized Default Obligations (CDOs) Complex securities tied to subprime mortgages, contributing to the 2008 crisis.
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