FINRA, the Financial Industry Regulatory Association, is the successor to the National Association of Securities Dealers and is authorized by Congress to regulate and oversee the broker-dealer industry, insuring that it operates fairly and honestly. It oversees over 4,000 brokerage firms and more than 600,000 brokers across the country—and analyzes billions of daily market events.
What does FINRA do?
FINRA regulates securities brokers and dealers, and other entities involved in the buying and selling of securities. FINRA works closely with the Securities Exchange Commission (SEC) to ensure compliance with federal laws.
FINRA has a wide range of responsibilities, including providing examinations and licenses for securities professionals, maintaining rules and regulations related to the trading of stocks and other securities, as well as detecting and punishing insider trading. FINRA also enforces disciplinary actions against brokers and firms who are found to have violated federal laws or FINRA’s own rules. Additionally, FINRA collects data on the trading activities of certain market participants which it uses to inform SEC enforcement actions. Through its oversight activities, FINRA helps protect investors who buy or sell securities in US markets by helping to ensure fair dealing, market integrity and the availability of relevant information.
FINRA also educates investors about the risks involved in investing, provides them with advice on how to make smart investment decisions, and helps maintain investor confidence by providing a safe and secure infrastructure for trading. FINRA also works with state securities regulators to coordinate enforcement efforts and advise investors. By ensuring compliance and protecting investors, FINRA helps foster fair and orderly markets — establishing the trust necessary for our economy to thrive.
FINRA also provides a dispute resolution program that allows for quick resolution when issues arise between investors and their advisors or brokers. FINRA’s Investor Education Foundation provides resources that inform investors about certain investments and strategies. Finally, FINRA also tracks arbitrators to ensure consistency in rulings, develops best practices for firms, and publishes key industry data such as trading volumes.
FINRA’s arbitration forum is the largest securities arbitration forum in the country. To learn more about securities arbitration at FINRA read Introduction to Securities Arbitration.
Who Regulates FINRA?
FINRA is regulated by the SEC under Section 15A of the Securities Exchange Act of 1934. FINRA has its own board of directors, staff, and offices. Its headquarters are located in Washington, D.C.
Where can I find more information about FINRA?
You can learn more about FINRA at finra.org. If you need help with any questions regarding FINRA, you can contact them directly at 1-800-FINRA (1-800-633-3276).
Mark Astarita is a nationally recognized securities attorney, who represents investors, financial professionals and firms in securities litigation, arbitration and regulatory matters, including SEC and FINRA investigations and enforcement proceedings.
He is a partner in the national securities law firm Sallah Astarita & Cox, LLC, and the founder of The Securities Law Home Page - SECLaw.com, which was one of the first legal topic sites on the Internet. It went online in 1995 and is updated daily with news, commentary and securities law related links.