FINRA

FINRA, the Financial Industry Regulatory Authority, is a self-regulatory organization overseen by the U.S. Securities and Exchange Commission (SEC) that regulates brokerage firms and registered securities representatives. It is the largest independent regulator for securities firms operating in the United States and works to maintain market integrity and protect investors.

Created in 2007, FINRA emerged from the consolidation of the National Association of Securities Dealers (NASD) and the regulation, enforcement, and market-dealing functions of the New York Stock Exchange, under SEC supervision. The merger was intended to streamline regulation of broker-dealers and standardize industry oversight.

FINRA writes and enforces rules governing member firms and their personnel, conducts examinations of member firms to ensure compliance with supervisory and financial standards, and administers licensing and qualification requirements. It oversees licensing examinations such as the Securities Industry Essentials (SIE) and license exams Series 7, 63, and 66, as well as continuing education. The organization also regulates advertising and sales practices, monitors member conduct, and can impose sanctions, including fines, suspensions, or expulsions.

In addition to regulatory tasks, FINRA operates the FINRA Dispute Resolution program, providing arbitration and mediation services for investors and broker-dealers in securities disputes. It also engages in market surveillance, publishes regulatory notices, and provides data to support market transparency and compliance.

FINRA governance is provided by a board comprising independent and industry-affiliated members, with authority to adopt rules that SEC approval governs. The organization is funded by member firm dues and assessments, regulatory fees, and penalties collected through enforcement actions.