Year 3 · Applied Finance · Regulation & Ethics
Regulation & Ethics
Understand the regulatory and ethical foundations of professional finance: market integrity, MNPI, conflicts, fiduciary duties, client protection, AML/KYC, communications and emerging technology risks.
LEARNING OBJECTIVES
What you should be able to explain after this lesson
01
Explain why regulation exists and which risks it seeks to reduce.
02
Recognize market abuse, insider trading and misuse of material nonpublic information.
03
Identify conflicts of interest and appropriate controls or disclosures.
04
Distinguish fiduciary duty, suitability, best-interest and disclosure obligations conceptually.
05
Understand core AML, KYC and sanctions-control principles.
06
Apply ethical judgment when rules are incomplete or ambiguous.
07
Evaluate conduct risks in research, sales, trading, communications, data and AI-enabled workflows.
CONCEPT MAPFrom rulebook to professional judgment
Financial regulation protects trust, market integrity and vulnerable participants
CORE FACTS · SAME IN EVERY MODE
Regulation seeks to reduce fraud, market abuse, information asymmetry, systemic risk and misconduct.
Different financial activities create different obligations for issuers, brokers, advisers, banks, asset managers and exchanges.
Rules often combine prescriptive requirements with principles-based standards.
Compliance is a minimum standard; ethical conduct can require more than literal rule-following.
BeginnerTeaching style changes, knowledge does not.
Finance works only if people trust that markets are reasonably fair and that professionals follow rules. Regulation creates minimum standards for behavior, disclosure and risk control.
PROFESSIONAL VOCABULARYMarket integrity / intégrité de marché Compliance / compliance Conduct risk / conduct risk
Condition in which markets function fairly, transparently and without prohibited manipulation.
Processes designed to ensure conduct aligns with applicable laws, rules and internal policies.
Risk of harm arising from inappropriate behavior toward clients, markets or counterparties.