Financial Industry Regulatory Authority (FINRA)

The Financial Industry Regulatory Authority (FINRA) is a self-regulatory organization (SRO) in the United States that oversees and regulates brokerage firms and registered securities professionals. It was formed in 2007 through the consolidation of the regulatory functions of the National Association of Securities Dealers (NASD) and the enforcement and arbitration functions of the New York Stock Exchange (NYSE).

Here are some key functions and responsibilities of FINRA:

• Regulation of Brokerage Firms: FINRA regulates and licenses brokerage firms that operate in the United States. It establishes and enforces rules and regulations governing the conduct and operations of these firms, ensuring compliance with federal securities laws and market integrity standards.
  
  
• Licensing and Registration: FINRA oversees the licensing and registration of securities professionals. It sets qualification and examination requirements for individuals seeking to become registered representatives, investment advisers, and other industry professionals. FINRA's licensing and registration system is known as the Central Registration Depository (CRD).
  
  
• Rulemaking and Compliance: FINRA establishes rules and regulations that govern the conduct of brokerage firms and their associated persons. These rules cover a wide range of areas, including sales practices, suitability of investments, advertising, record-keeping, anti-money laundering, and dispute resolution. FINRA monitors and enforces compliance with these rules.
  
  
• Investor Protection: One of FINRA's primary objectives is to protect investors and maintain market integrity. It does so by promoting fair and ethical practices in the securities industry, ensuring proper disclosure of information to investors, and taking enforcement actions against individuals or firms that engage in fraudulent or abusive practices.
  
  
• Market Surveillance: FINRA maintains surveillance systems to detect and investigate potential violations of securities laws and regulations. It monitors trading activities and market data to identify manipulative or illegal trading practices, insider trading, and other misconduct. FINRA also works closely with other regulatory agencies to share information and coordinate enforcement efforts.
  
  
• Dispute Resolution: FINRA operates the largest securities dispute resolution forum in the United States, known as the Financial Industry Regulatory Authority Dispute Resolution (FINRA DR). It provides a fair and efficient arbitration and mediation process to resolve disputes between investors and brokerage firms or their associated persons.
  
  

It's important to note that FINRA is not a government agency but a self-regulatory organization authorized by the U.S. Securities and Exchange Commission (SEC) to regulate the securities industry. It plays a critical role in ensuring investor protection, market integrity, and fair practices within the U.S. brokerage industry.