A regulatory agency (also regulatory authority, regulatory body or regulator) is a public authority or government agency responsible for exercising autonomous authority over some area of human activity in a regulatory or supervisory capacity. An independent regulatory agency is a regulatory agency that is independent from other branches or arms of the government.
A regulatory agency is the same thing as a regulatory body.
It's definitely correct because it says in the first sentence that a regulatory agency can also be known as a regulatory body, so they're the same thing. I don't think the system understood what the first sentence meant in that regard, so it answered incorrectly.