FINRA Compliance

FINRA plays a critical role in ensuring both the integrity and compliance of America’s financial system—all at no cost to taxpayers. The following is an excerpt from their website.

Working under the supervision of the Securities and Exchange Commission, we:

Write and enforce rules governing the ethical activities of all registered broker-dealer firms and registered brokers in the U.S.;
Examine firms for compliance with those rules;
Foster market transparency; and
Educate investors.

FINRA compliance refers to the adherence to regulations set forth by the Financial Industry Regulatory Authority (FINRA). FINRA is a self-regulatory organization that oversees brokerage firms and their registered representatives in the United States. It sets rules and standards to ensure fair and ethical practices within the securities industry. Compliance with FINRA regulations is important for brokerage firms to maintain their licenses and operate within the legal framework. It covers various areas such as sales practices, advertising, recordkeeping, and financial reporting.

FINRA Regulates Broker-Dealers, Capital Acquisition Brokers, and Funding Portals. A Broker Dealer buys or sells securities on behalf of its customers, its own account, or both. A Capital Acquisition Broker is a Broker Dealer subject to a narrower rule book.

Learn more at finra.org

FINRA both administers the qualifying exams for securities professionals and provides resources, such as BrokerCheck, that help to protect investors.

Is FINRA part of the federal government?

FINRA is a not-for-profit entity that is not part of the government.

FINRA vs. the SEC: What’s the Difference?

The Financial Industry Regulatory Authority (FINRA) handles the licensing and regulation of broker-dealers.2
FINRA is a not-for-profit entity that is not part of the government.
The Securities and Exchange Commission (SEC) is a government organization that is meant to protect investors and ensure the integrity of the securities market.3
The SEC oversees FINRA and acts as the first level of appeal for actions brought by FINRA.4