FINRA

Financial Industry Regulatory Authority

The largest self-regulatory organization (SRO) in the United States for the securities industry, overseeing broker-dealers and their registered representatives. Key points about FINRA:

1. Establishment: FINRA was formed in 2007 by combining the National Association of Securities Dealers (NASD) and the New York Stock Exchange (NYSE) regulatory arm.
2. Membership: All broker-dealers conducting business with the U.S. public must be registered with FINRA. As of 2021, FINRA oversees more than 3,400 broker-dealer firms and approximately 617,000 registered representatives.
3. Responsibilities: FINRA’s primary responsibilities include:
   • Writing and enforcing rules governing the ethical conduct of broker-dealers and their registered representatives
   • Examining broker-dealers for compliance with FINRA rules and federal securities laws
   • Educating investors and providing tools to help them make informed investment decisions
   • Administering the largest dispute resolution forum for investors and broker-dealers
   • Detecting and preventing market manipulation and fraud
4. Rulemaking: FINRA proposes and adopts rules that govern the activities of its members. These rules cover areas such as suitability, advertising, customer account statements, and the use of social media by registered representatives.
5. Examinations: FINRA conducts regular examinations of its member firms to assess their compliance with applicable rules and regulations. These examinations may be routine or prompted by specific concerns or complaints.
6. Enforcement: When FINRA identifies violations of its rules or federal securities laws, it has the authority to bring disciplinary actions against member firms and their associated persons. Sanctions may include fines, suspensions, or bars from the industry.
7. Oversight: As an SRO, FINRA is subject to oversight by the Securities and Exchange Commission (SEC), which reviews and approves FINRA’s rules and can take enforcement action against FINRA if necessary.

FINRA plays a crucial role in protecting investors and maintaining the integrity of the U.S. securities markets by regulating and overseeing the activities of broker-dealers and their registered representatives.

• Abbreviation: FINRA