Series 14: 1.5.2. Financial Industry Regulatory Authority (FINRA)

1.5.2. Financial Industry Regulatory Authority (FINRA)

The merger of the NASD and NYSE Regulation into FINRA began a movement to create a single regulator for all securities firms that do business with the public. In the succeeding years, eleven U.S. exchanges have turned over their responsibility for insider-trading surveillance of exchange-listed equity securities to FINRA. Today FINRA is responsible for the surveillance of 80% of the trading volume of U.S. equity markets.

FINRA’s first responsibility is to register all broker-dealers operating in the United States. FINRA establishes and interprets the rules that govern the over-the-counter markets, and it is charged with ensuring industry compliance with those rules. FINRA investigates members and registered employees for compliance with securities law, issues complaints against violators, conducts disciplinary hearings, and mediates intra-industry disputes. In addition, FINRA licenses, provides qualifying exams for, and requires continuing education for all member employees.