Financial markets have multiple regulatory agencies that establish compliance with rules regarding financial transactions in exchanges and banks.

Markets are typically regulated by governmental or independently established regulatory agencies. Regulatory agencies promote fair and orderly markets and ensure that all individuals and institutions operate within the laws set forth by the governing bodies. Regulators have the authority to investigate fraudulent activity and sanction or penalize market participants.

In Pakistan

SECP

The Securities and Exchange Commission of Pakistan (SECP) is the successor to the erstwhile Corporate Law Authority (CLA), which was an attached department of the Ministry of Finance. The process of the CLA's restructuring was started in 1997 under the Capital Market Development Plan of the Asian Development Bank (ADB). The parliament passed the Securities and Exchange Commission of Pakistan Act, which was promulgated in December 1997. Consequently, the SECP, having an autonomous status, became operational on January 1, 1999.[3] The Act gave the organization the administrative authority and financial autonomy to carry out the reform program for Pakistan's capital market.

The scope of the authority of the SECP has been gradually widened. The insurance sector, non-banking financial companies, and pension funds have been added to the purview of the SECP. Now the SECP's mandate includes investment financial services, leasing companies, housing finance services, venture capital investment, discounting services, investment advisory services, real estate investment trust and asset management services, etc. The SECP also regulates various external service providers that are linked to the corporate sector, like chartered accountants, rating agencies, corporate secretaries and others. SECP has the responsibility to make sure the accuracy of organizations or corporations under the law of Pakistan.

In United States

SEC

The Securities and Exchange Commission (SEC) is an agency of the United States government that regulates markets and investors. The SEC was created in 1934 in response to the irresponsibility exhibited during the stock market crash of 1929. The SEC’s role is to enforce laws that promote fair, orderly, and efficient markets while maintaining a functioning economy.

The SEC requires all issuers of stock to provide full disclosure regarding their business activity. The SEC has the power to administer lawsuits against investors who break laws such as insider trading, accounting fraud, falsifying information, and more. The SEC is composed of 5 bi-partisan members who serve five-year terms.

The SEC has many rulings that deal specifically with individual traders. One of those rulings defines a “pattern day trader” and impacts the trading activity of retail traders. According to the SEC’s rulings, a pattern day trader is a trader who executes four or more day trades in a five-day period using a margin account.

Pattern day trading regulations were put in place to discourage excessive trading. Pattern-day traders must maintain a margin account balance of at least $25,000 at all times. If the account drops below $25,000, no trading activity is allowed until the minimum requirement is fulfilled again. Day trading is defined as buying and selling a security in the same trading session.