The regulatory environment refers to the set of laws, rules, and guidelines that govern how businesses and organizations operate. These regulations are established by government bodies at various levels, including local, state, and federal, to ensure compliance, protect public interests, and promote fair competition. In different industries, such as finance, healthcare, and environmental sectors, the regulatory environment can vary significantly. For example, the Securities and Exchange Commission (SEC) oversees financial markets, while the Environmental Protection Agency (EPA) regulates environmental standards. Understanding this environment is crucial for businesses to operate legally and ethically.