A regulated entity is an organization or institution that is subject to oversight, supervision and legal obligations imposed by a government authority or regulatory body. Regulated entities must comply with specific laws, rules and standards designed to protect the financial system, promote transparency and prevent financial crimes such as money laundering, terrorist financing and fraud.

In the context of Know Your Customer (KYC) and Anti-Money Laundering (AML) compliance, regulated entities typically include banks, investment firms, insurance companies, payment service providers, money transfer businesses and certain non-financial businesses like real estate agents and law firms. These entities are required to implement compliance programs that include customer identification procedures, due diligence, ongoing monitoring, transaction reporting and record-keeping.

Failure to meet regulatory requirements can result in significant fines, sanctions, reputational damage and even restrictions on business operations. Regulated entities play a critical role in maintaining the integrity of the financial system by detecting and reporting suspicious activities, conducting risk assessments and adhering to national and international compliance standards. Their obligations vary depending on the jurisdiction, but their core responsibility remains ensuring that their operations do not facilitate or enable financial crime.