The most common and most likely answer to this crossword clue is the 4 plus 9 letter word IRIS DIAPHRAGM
I've seen this crossword clue in The Times
I
R
I
S
D
I
A
P
H
R
A
G
M
More clues leading to the result IRIS DIAPHRAGM
Buddy explains!
The straight part
We know that "that handles light regulation" is the straight/definition part of the clue. The straight part is often a synonym or definition, in this case that handles light regulation = iris diaphragm.The cryptic/wordplay part
In cryptic crossword there's often an wordplay/cryptic part as well.This part involves a more complex hint, such as an anagram, homophone, hidden word, etc.
Sadly, We don't have an explanation for this specific crossword clue yet.