This lesson examines the regulatory frameworks and ethical standards that govern investment banking and capital market activities in the U.S., Europe, and other major jurisdictions.

8.1 The Regulatory Landscape
Investment banking is one of the most heavily regulated industries due to its critical role in the financial system. The NYU Tandon course includes “an understanding of the major securities laws and how they have changed over time” . The IIM Calcutta programme covers “Securities Market Regulations” as a distinct module .

8.2 Key U.S. and European Regulations

  • U.S. Framework: The Securities Act of 1933 (registration of new securities) and the Securities Exchange Act of 1934 (regulation of exchanges and broker-dealers). The Sarbanes-Oxley Act (2002) established stricter corporate governance and financial reporting standards. The Dodd-Frank Act (2010) overhauled financial regulation in response to the 2008 crisis .

  • European Framework: The MiFID II/MiFIR framework is the cornerstone of European securities regulation. It mandates transparency, investor protection, and the unbundling of research and execution costs.

8.3 Regulatory Compliance and Ethics
The Coursera specialization on investment banking emphasizes “regulatory compliance” and understanding “global regulations and supervisory frameworks” . Ethical conduct is paramount. Insider trading, market manipulation, and conflicts of interest are strictly prohibited. A key part of the investment bank’s function is to ensure all activities are conducted within the confines of the law and to the highest professional standards. The IIM Calcutta programme notes that securities market research is governed by specific regulations concerning how analysts can provide advice to clients 

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