Self-Regulatory Organization

Self-regulatory organization (SRO)

Organizations that enforce fair, ethical, and efficient practices in the securities and commodity futures industries, including all national securities and commodities exchanges and the NASD.

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self-regulatory organization (SRO)

A member-operated organization that establishes and enforces minimum standards and rules of conduct. The National Association of Securities Dealers, the National Futures Association, and the New York Stock Exchange are examples of self-regulatory organizations.

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Self-Regulatory Organization

A professional organization, unaffiliated with a government, having certain, limited regulatory authority over members. An example is the American Dental Association, which has the ability to set standards and enforce discipline over dentists in the United States. In trading, most exchanges are self-regulatory organizations, as are trading-related professional organizations. SROs assist the SEC and government regulators in the maintenance of operating standards and the arbitration of disputes. See also: SICA.

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Self-regulatory organization (SRO). All securities and commodities exchanges in the United States are self-regulatory organizations (SROs), as is NASD.

These bodies establish the standards under which their members conduct business, monitor the way that business is conducted, and enforce their own rules.

For example, the New York Stock Exchange (NYSE) requires that client orders delivered to the floor of the exchange be filled before orders that originate with traders on the floor, who buy and sell for their own accounts.