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What are regulatory requirements?
Regulatory requirements are rules that businesses must follow. They are invoked by designated regulators and compliance officers – those who make and enforce the rules.
Also known simply as regulations, these obligations can specify different things. For example, qualifications that must be gained, processes that must be followed or records that must be kept.
Purpose of regulatory requirements
Regulatory requirements are massively important in today’s technological world. With an ever-growing pool of threats, their primary purpose is to protect. In some industries, this means physically protecting the well-being of people. In others, regulators aim to protect assets, data and integrity.
Moreover, regulations help set industry-wide minimum standards of practice. This gives potential customers the confidence to make decisions, knowing that they have all the information they require. It also supports the companies themselves to manage risk and reduce the risks associated with harmful protocols.
Finally, regulations help businesses to achieve their goals. By subscribing to the best practices set out in regulatory requirements, companies will find themselves on a level playing field with competitors (no matter their access to resources). Regulatory requirements can help to level this very playing field.
Almost every worker in a job has to follow some form of regulatory requirement and can even refer to licenses or accreditations. Some examples of highly regulated industries include:
Alternatively, many professionals are not required to follow regulations. Some of the least regulated professions include the likes of holistic healthcare professionals and management consultants.
What is regulatory compliance?
Regulatory compliance essentially means following the rules. It shows that companies are satisfying external mandates.
Some companies will have a designated regulatory team or compliance officer. Their purpose is to seek out new, relevant regulations and plan how the company will comply. Compliance officers may also implement new strategies or processes in order to follow the best practices as part of the compliance framework.
Examples of regulatory requirements
Here are some examples of regulatory requirements across industries:
|Industry||Regulator||Regulation||Who must comply?|
|Financial||Financial Conduct Authority||COBS4: Product descriptions and advertisements should be ‘clear, fair and not misleading.’||Financial services institutions, including adjacent organizations that handle sensitive data.|
|Healthcare||Medicines and Healthcare Products Regulatory Agency||Products must have the UKCA marking before being launched in the market.||Medical device manufacturers|
|Legal||Solicitors Regulation Authority||Framework for individual ethical and competent practice.||Solicitors legal professionals|
|Food||Food Standards Agency||Food safety act: do not include, treat or remove anything in food which may be harmful or damaging to the health of the person eating it.||Any business involved in the preparation, transportation, storing or selling of food.|
What happens if you don’t comply?
A compliance violation refers to the discovery of non-compliance. It could be a single employee who’s not following the rules or a system running through the entire business. Failure to follow compliance frameworks and reporting requirements could lead to further action from the regulatory body.
One of the most prominent compliance obligations across industries is data privacy or the handling of personal data. Companies must ensure proper security controls on personal information and recently, GDPR rules have come into practice. We’ve seen monetary fines and other penalties for companies who don’t follow regulations, proven by an investigation from an external compliance officer.
But it’s not all doom and gloom.
You can now automate regulatory compliance with technology. Our RegTech products at CUBE have horizon-scanning capabilities, using AI and machine learning to tailor the relevant regulations to every firm. By automating end-to-end compliance and replacing manual tasks, CUBE can reduce the cost of compliance.