NASD

The National Association of Securities Dealers (NASD) was a United States self-regulatory organization responsible for overseeing broker-dealers and the over-the-counter securities market. As an SRO, NASD wrote and enforced rules for member firms, conducted examinations and registrations, monitored trading practices, and administered a dispute-resolution program through securities arbitration. Its regulatory framework operated under the oversight of the Securities and Exchange Commission (SEC).

Founded in 1939 in the wake of the Securities Exchange Act, the NASD regulated member firms and their registered representatives, handling licensing, continuing education, and periodic examinations. It also played a central role in overseeing the over-the-counter market and contributed to the development of the Nasdaq Stock Market, established in 1971 as an electronic trading and quotation system; Nasdaq later evolved into a standalone exchange operator.

In 2007, the NASD merged with the regulatory arm of the New York Stock Exchange (NYSE Regulation) to form the Financial Industry Regulatory Authority (FINRA). The merger consolidated securities industry regulation under a single self-regulatory organization. NASD’s core functions—rulemaking, registration and supervision of members, enforcement, and arbitration—were continued and expanded by FINRA, and NASD ceased to exist as an independent entity.

Historically, NASD helped set standards for broker-dealer conduct, contributed to market integrity, and provided formal arbitration services for investor disputes. Its legacy remains in FINRA’s ongoing regulatory framework and dispute-resolution programs.