I think a 'regulatory body' means an organisation or group that regulates (controls and checks) a process or medium, and the output of products. For example, one body regulates the age rating in films, another for TV.
I think this process is important as it enures products of quality and relevance to the topic are produced, and the products are controlled so they are not released to an inappropriate or unwanted audience. For example, a regulatory body would control what is published in a newspaper, in terms of content - what is included and what isn't, and how the content is given.
Also, not regulating content can lead to criminal charges (prosecution), the product being banned or removed from circulation.
Examples:
OFCOM
ASA
BBFC
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