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FINRA – Financial Industry Regulatory Authority

FINRA is an independent, non-profit organization, authorized by Congress. Financial Industry Regulatory Authority strives to safeguard US investors.

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The FINRA – Financial Industry Regulatory Authority is an independent, non-profit organization, authorized by Congress. Financial Industry Regulatory Authority strives to safeguard US investors by ensuring that the broker-dealer sector operates fairly and properly.

The regulatory body was created through the consolidation of The National Association of Securities Dealers (NASD) and the member regulation, enforcement and arbitration operations of the New York Stock Exchange. Such consolidation was approved by the Securities and Exchange Commission on the 27th of July, 2007. It was put into effect July 30, 2007.

Core tasks of FINRA – Financial Industry Regulatory Authority

FINRA is striving to assure investor protection and market integrity via effective regulation of broker-dealers. The watchdog is responsible for writing and enforcing framework governing the activities of 3,869 broker-dealers with 641,133 across the US. Moreover, FINRA is examining the firms for compliance with the abovementioned framework. In addition to this, the regulator is encouraging market transparency and education investors.

Additionally, FINRA highlights that it is enforcing high ethical standards across markets and bringing the essential resources and expertise to regulation at no cost to taxpayers.

Other tasks of FINRA

Furthermore, the regulatory body states that it is working to ensure:

  • Investors receives the basic protections they deserve;
  • Persons or entity, selling a securities product is tested, qualified and licensed;
  • Every securities product promotion in the market is truthful;
  • Any securities product sold to investors is adequately fitting their needs;
  • Investors receive full disclosure about the investment product before purchase.

Moreover, FINRA believes that the technology is an essential part of the investors’ protection system. Thus, the regulatory body is making sure that the technology helps it to efficiently monitor brokerage firms, accurately oversee the US equities markets, fast identify potential fraud, and keep investors aware through tools like BrokerCheck.

As a fact, in 2015, FINRA brought 1,512 disciplinary actions against registered brokers and companies. The regulator levied $95.1 million in fines. Moreover, Financial Industry Regulatory Authority ordered $96.6 million in restitution to harmed investors.

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