regulatory check process is a process of checking the salability of the material. the material consists of substances. there are specific regulations which puts ban or restriction on substances in there region. so duringg the supply chain transaction particularly during sales the substance's position (allowed/restricted/banned) will be checked against the corresponding regulatory list. this functionality is now a days mandatory so that the organisations will adhere to the compliance. Again this functionality can also be used for checkin the banned country list, blackisted vendor etc.
this functionality is supported in SAP REACH solution. but in 4.6c you have to go for customer specific developement.