A regulatory framework is a set of rules and guidelines created by governments or organizations to control how certain activities are conducted. This framework ensures that businesses and individuals operate fairly and safely, protecting the interests of the public and the environment. For example, the Environmental Protection Agency (EPA) in the United States establishes regulations to limit pollution and promote clean air and water. These regulations can cover various areas, including finance, health, and safety. By having a clear regulatory framework, authorities can monitor compliance and enforce penalties for violations. This helps maintain order and trust in systems like banking and healthcare, ensuring that everyone follows the same standards.