Series 14: 1.5.2. FINRA

1.5.2. FINRA

FINRA’s first responsibility is to register all broker-dealers operating in the United States. Broker-dealers who do business in the securities industry must register with FINRA, except for those who are part of a bank or deal exclusively in exempt securities, such as municipal securities. Associated persons of FINRA member firms must register with FINRA and pass qualification exams administered by FINRA. FINRA establishes and interprets the rules that govern the OTC 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.

Many U.S. exchanges have turned over their responsibility for insider-trading surveillance of exchange-listed equity securities to FINRA. Today, FINRA is responsible for surveillance of 80% of the trading volume of U.S. equity markets.