FINRA
Back to GlossaryDefinition
An independent, nongovernmental organization that writes and enforces the rules governing registered brokers and broker-dealer firms in the United States.
Summary
FINRA (Financial Industry Regulatory Authority) is the largest independent regulatory organization for securities firms doing business in the United States. Created in 2007 through the consolidation of NASD and NYSE regulation, FINRA oversees approximately 4,250 brokerage firms and more than 624,000 registered securities representatives. It operates as a self-regulatory organization (SRO) under SEC oversight, writing and enforcing rules for broker-dealers, conducting examinations, and handling disciplinary actions. FINRA also operates the Central Registration Depository (CRD) and BrokerCheck systems.
Usage Context
Understanding FINRA is crucial when studying securities regulation, broker-dealer operations, compliance requirements, and the regulatory structure of U.S. financial markets. Essential for comprehending how the securities industry is supervised and disciplined.
Common Confusions
- Confusing FINRA with the SEC - FINRA regulates firms and individuals, SEC regulates markets and public companies
- Thinking FINRA is a government agency when it's actually a private SRO
- Assuming FINRA regulates all financial professionals when it only covers broker-dealers
- Mixing up FINRA with state securities regulators
- Believing FINRA can regulate investment advisors directly
