Yes, prop traders and proprietary trading firms are subject to financial regulations, but these can vary significantly depending on the country and the type of assets being traded. For example, in the United States, firms must comply with the rules set by the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). In Europe, MiFID II regulations apply. These rules ensure transparency, fairness, and protection against market manipulation. Each firm also establishes internal risk management policies to comply with these regulations.