What Is FINRA?
FINRA, or the Financial Industry Regulatory Authority, is a non-profit organization that regulates the activities of broker-dealers in the United States.
FINRA was created in 2007 by consolidating the National Association of Securities Dealers (NASD) and the New York Stock Exchange Regulation.
It was created to protect investors and ensure the fairness and integrity of the securities industry.
FINRA does this by regulating member firms and their employees, providing education and training, and enforcing rules and regulations.
What Does FINRA Do?
FINRA's main goal is to protect investors by ensuring that the firms and brokers they deal with remain honest and transparent.
To do this, FINRA requires firms to disclose information about their business practices, products, and services.
FINRA also imposes rules on firms and brokers to ensure they act in their clients’ best interests.
FINRA Licensing
In order to become a licensed broker or dealer, here is the step-by-step process:
- Step One: Submit an application to FINRA
- Step Two: Pass the FINRA Entrance Examination
- Step Three: Register with a broker-dealer
- Step Four: Complete the Regulatory Element of the Continuing Education Program
- After you have completed these steps, you will be required to take an annual continuing education exam
You can check the whole process here, along with examinations.
The Bottom Line
FINRA is a non-profit organization that regulates the activities of broker-dealers in the United States.
FINRA was created in 2007 by consolidating the National Association of Securities Dealers (NASD) and the New York Stock Exchange Regulation.
Its main goal is to protect investors by ensuring that the firms and brokers they deal with remain honest and transparent.
To become a licensed broker or dealer, you must submit an application to FINRA and pass the FINRA Entrance Examination.
Note that you will be required to take an annual continuing education exam.
FAQs
1. Is there a payment for the application?
There are some fees associated with the application and examination process. Fees may vary depending on the type of firm you register as and your location.
2. Do I have to renew annually?
Yes, you will have to take an annual continuing education exam.
3. What sector does FINRA cover?
FINRA covers all firms that engage in the business of securities. This includes firms that trade stocks, bonds, and other investments.
4. Does FINRA have the power to shut down firms?
FINRA does have the power to shut down firms that do not comply with regulations. However, this is typically a last resort after other enforcement actions have failed.
5. Can I file a complaint against my broker?
Yes, you can file a complaint against your broker if you feel they have engaged in misconduct. FINRA's main goal is to protect investors by ensuring the firms and brokers they deal with remain honest and transparent.
