Essays on Financial Services and Market Sector Regulation in Australia Case Study

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The paper "Financial Services and Market Sector Regulation in Australia" is a good example of a finance and accounting case study.   With the recent economic downturn experienced at present, many governments are establishing policies and regulations to govern the financial services and markets sectors (Robinson, 2009). This is in an effort to avoid a recurrence of the financial crisis of 2007 that had a negative impact on the economies of many countries and the overall global financial market. These regulations have affected many businesses because of their provisions that comprise of very stringent measures and requirements (Robinson, 2009).

In Australia and the United States, these regulations are a priority considering the impact of the recession on their economy. However, financial analysts are a bit sceptical regarding the accuracy of these policies and regulations in straightening the financial services sector and the financial markets sector (Rice, 2011). The regulations executed in Australia and the US have some similarities and differences based on the extent of the recession to the economy. US regulations There are a couple of reforms being implemented in the US and other parts of Europe and other continents and the Australian government has called upon its citizens in those countries to brace themselves for the impact of the regulations.

These reforms reveal a significant rise in regulations on the financial sector that presents several implications to businesses and consumers (Richard et al 2011). In the US, the past few months have been marked by the presentation of rules to govern the financial sector. The Securities and Exchange Commission (SEC) together with other agencies have put forward rules to ensure the implementation of the Dodd-frank Wall street Reform together with the Consumer Protection Act of 2010 (Hepworth, 2012).

While this is legislation intended for the US alone, its effects will have an impact on the financial services and markets in Australia (Hepworth, 2012). The Dodd-Frank Act includes some provisions that allow the US government to supervise the activities of foreign non-bank financial companies and firms (Massey, 2011). As such, Australian companies operating in the US will also be under scrutiny and supervision of the US. However, this supervision will take place under one condition.

A company will be subject to supervision only if the US government establishes a link between the company and the US economy. These reforms also give a mandate to the US government to initiate a liquidation process for any company, including Australian companies operating there (Massey, 2011). Liquidation will result from the probability of the company posing unpleasant financial impacts on the stability of the US economy. Certain Australian investment advisors will be required, under the new reforms, to register with the SEC to operate as financial advisers in the US (Massey, 2011).

This is in contrast to the situation before the reforms when they were not required to register with the SEC. this requirement will affect Australian financial advisors because of a change in the operation process in dealing with private equity and other investment portfolios. This will result from the mandatory registration requirement that will restrict their operations and limit them highly. Australian firms will be adversely affected. The recent regulation of derivatives implemented in the US was directed towards regulating non-US entities. This implies that, for instance, that non-financial Australian firms and organizations that engage in activities related to swaps will have to put up margin, a requirement that did not exist before the reforms.

Australian banking firms and other foreign entities that operate in the US through subsidiaries will be governed by restrictions on proprietary trading and hedge fund sponsorship (Massey, 2011). In addition, the SEC and other agencies are establishing other rules that will aid in the implementation of the Dodd-Frank Act (Michael, 2011).


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