Regulation has become a term used in name only. In terms of how regulation operates, this is an ongoing process — you can’t just get a license to conduct business. A company that has a license does not automatically mean they follow sound ethical practices and have sound business practices. True regulation is evidenced by the activities, systems of internal controls, and the consistent oversight of what the company does each day.

In an environment that allows transparency to be achieved through effective communication, building trust, and executing strong processes related to the management of risk and how to manage client funds. 

Therefore, transparency without the above-mentioned processes becomes simply a marketing strategy.

As a result of this strong governance structure, there is a clear line of responsibility all the way up to the top of each brokerage. There is a clearly defined framework for what gets decided, what is supervised, and to what extent conflicts of interest can exist. When governance structures are weak, they create new opportunities for error, increase delays, and ultimately increase the risk of operational failures. Regulation is at its best when there is a strong foundation of disciplined internal structures to support it.