SIE STC USA Greenlight Exam 2025 – 400 Free Practice Questions to Pass the Test

The concept that refers to the prevention of fraudulent activities in securities trading is regulation. Regulations are established by government agencies and self-regulatory organizations to ensure fair and transparent practices in the financial markets. These regulations are crucial for maintaining investor confidence and promoting integrity within the securities industry. They help to enforce the rules regarding trading practices, disclosure requirements, and market conduct, thereby preventing fraud, insider trading, and other unethical behaviors that could undermine the trading environment.

Effective regulation sets the legal framework within which securities transactions occur, providing oversight and enforcement mechanisms to protect investors and ensure fair competition among market participants. This includes monitoring trading activities, requiring firms to adhere to specific guidelines, and imposing penalties for violations. Overall, regulation acts as a safeguard against fraud in the securities market, contributing to its overall stability and reliability.