Info 1: government agency Definition
Info 2: how government agency works
Info 3: government agency vs self regulated organization
Info 4: example of government agency
Opening information:
Government agency breaks into two words government and agency, government means a ruler of something, and agency means a firm that used to do something on behalf of another person or firm.
A government agency is a firm that does the activities on the ruler’s behalf. So now let’s have a look at what is a government agency, how the government agency works in the public market among all the Investors and speculators, and what is the difference between a government agency and self regulated organization, finally one clear example of a government agency.
Info 1: government agency Definition
Whenever any of the rulers couldn’t be involved in the direct protection or activities, they assembled the agent or person or firm on behalf of such ruler to act and implement that action activity. Each of the rulers had some agency to act on behalf of and rule towards a certain market.
When comes to the stock market, the central government couldn’t directly align with the public market, so they formed a firm that acted and followed the rules and laws to regulate each specific market.
Here the ruler of the firm or agent who acts and regulates the market on behalf of the authority government is called a government agency. So let’s dive into how government agencies work in the public market.
Info 2: how government agency works
A government agency doesn’t represent any specific single person or firm, instead, it’s an identity that refers to the persons who work under a ruler of a particular place.
The ruler represents the government and the persons who work under them for a certain purpose as a firm is what refers to the agency of such government.
Therefore any of the firms or teams who work with rules on behalf of the government are normally considered as government agencies in the public market.
They could rule certain markets or niches based on their government of agency constructed purpose, so any of the teams named under the certain ruler, then they are called a government agency.
The stock market which are place of exchange for the business shares of public companies, to avoid illegal activities in Such a market, the government has a ruler Security and Exchange Commission SEC, which they are considered a government agency.
Moreover, the commodities are the separated market from the stock market, which has traded more than billions of dollars in trading volume each day, and is regulated by the government ruler called the Commodity Futures Trading Commission (CFTC), this ruler is demonstrated as a government agency.
Next, the derivatives like an option and futures are regulated by the Security and Exchange Commission and the Commodity Futures Trading Commission based on what certain derivatives are listed, where these two government rulers became government agencies in the derivatives market.
On the other hand, among all derivatives, the forward contract has also become a kind of derivative, which such a contract is not used to trade in the commodities exchange or stock exchange.
Despite they are traded on the over-the-counter, which is regulated by the Forward Markets Commission (FMC), where this person is illustrated as a government agency.
So many of the parts of the public market that are regulated by the person or firm of government ruler, then are elaborate as a government agency.
Most people confuse the government agency and self regulated organization SRO, so let’s jump into the key difference anyway.
Info 3: government agency vs self regulated organization
The difference between a government agency and self regulated organization is, that the government agency is the ruler from the government side who takes action and follows the government laws of such market, they can create and make any kind of laws based benefits of a particular market.
On the other side, self regulated organizations are also a ruler of one kind of market but not from the government side, where they are not allowed to create new laws or take old rules of government laws, instead, they rule the market under such government agency based on their laws.
So the key difference between a government agency and self regulated organization is authority, to make you more clear about the government agency, let’s look into one clear example below.
Info 4: example of government agency
Say you and your friend had bought one kind of security but not the same security in the same market, whereas your friend had bought on the forex currencies market with an own regulation of National Futures Association.
And you had bought the stock from Company F which is regulated by the security and Exchange Commission SEC of the government.
Here the National Futures Association is named as a self-regulated organization, and the Security and Exchange Commission is determined as the government agency.