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Financial Industry Regulatory Authority

A self-regulatory organization that assists the SEC in regulating financial markets, notably exchanges and companies that deal with securities. Among other duties, FINRA enforces rules, arbitrates disputes, and provides training and licensing services. Contrary to the belief of some, it is not a government agency. It was created in 2007 with the merger of the National Association of Securities Dealers and the NYSE regulatory board.


FINRA, the acronym of the Financial Industry Regulatory Authority, is the largest self-regulatory organization (SRO) in the United States. It writes and enforces rules governing the securities industry as well as enforcing federal securities laws.

FINRA has jurisdiction over all broker-dealers and registered representatives, and has authority to discipline firms and individuals who violate the rules. It regulates trading in stocks, mutual funds, variable annuities, corporate bonds, and futures and options contracts on securities. It also acts as the SRO for a number of securities exchanges.

FINRA reviews materials that investment companies provide to their clients and prospective clients to ensure those materials comply with the relevant guidelines. The FINRA website also provides investor education and alerts on current issues of importance to investors.

Through its BrokerCheck database, FINRA provides a resource for investors to check the credentials of people and firms.

In addition, FINRA resolves disputes between broker-dealers and their clients, through either mediation or arbitration.

FINRA was created in 2007 by the merger of NASD (formerly the National Association of Securities Dealers) and the regulatory and enforcement divisions of the New York Stock Exchange (NYSE).

References in periodicals archive ?
FINRA said the changes to the advisory committees builds on enhancements to FINRA's committee structure announced in November.
In a separate announcement in mid-September, FINRA started publishing data on the diversity of its arbitrator pool on its website.
Of the 126 charges that were litigated by the SEC and FINRA and resulted in SEC initial decisions or FINRA Hearing Panel decisions during the study period, BDs and individuals succeeded in getting 12.
The rules apply to FINRA member firms and associated persons and entities, including life insurance agents who sell variable life and variable annuity products.
Having an ongoing, proactive compliance program in place, whether it is overseen in-house or by an outside compliance firm, can reduce angst before a FINRA examiner arrives, as well as help a firm maintain compliance.
FINRA estimates there are more than 15,000 individuals who have left the securities industry after being the subject of a final regulatory action and whose disciplinary history is not currently available on BrokerCheck.
The 2018 budget underscores the magnitude of the operational hurdles faced by FINRA and the need for significant belt tightening," Bennett adds, pointing to the $136 million in reserves that FINRA is "committed to spend to make up for the revenue shortfall.
Susan Schroeder, FINRA Executive Vice President and Head of Enforcement, said, This case highlights FINRAs persistent focus on high-risk conduct that causes investor harm.
At this time, FINRA is not charging transaction-level fees and is not publicly disseminating information on transactions in Treasuries.
If FINRA continues to assess fines in 2014 at the current rate, Sutherland said that 2014's fines will represent a 49% increase from the total fines reported by FINRA in 2013 to an estimated $85 million in 2014.