The Financial Industry Regulatory Authority (FINRA) is a self-regulatory organization established in 2007 through the consolidation of the National Association of Securities Dealers (NASD) and certain functions of the New York Stock Exchange’s regulation division. Authorized by Congress, FINRA operates as a non-governmental entity under the supervision of the Securities and Exchange Commission (SEC). Its founding aimed to streamline oversight and strengthen protections for investors in the securities markets.
FINRA’s mission is to protect investors and ensure the integrity of financial markets by regulating the conduct of broker-dealers and their representatives. It develops and enforces rules designed to promote ethical practices, administers qualifying exams for securities professionals, and provides educational resources like BrokerCheck, which allows investors to review the background and history of brokers and firms.
While the SEC serves as the overarching regulator for the securities industry, FINRA focuses specifically on broker-dealer firms, making it a critical layer in the regulatory framework. By identifying and addressing misconduct, FINRA helps maintain public trust in the financial system and ensures fair and honest markets.
For more information, see: https://www.finra.org/about
[Written in December of 2024 by the Cornell Law School Securities Law Clinic]