FINRA
Quick Definition
A self-regulatory organization that oversees broker-dealers and their registered representatives in the United States.
Key Takeaways
- Largest self-regulatory organization for the U.S. securities industry
- Oversees broker-dealers and their registered representatives
- Administers qualification exams like the Series 7 and Series 63
- Operates BrokerCheck for investors to research broker backgrounds
- Authorized by Congress but operates independently from the government
What Is FINRA?
The Financial Industry Regulatory Authority (FINRA) is the largest independent self-regulatory organization (SRO) in the United States, authorized by Congress to protect investors by ensuring the securities industry operates fairly and honestly. FINRA oversees approximately 3,400 brokerage firms and more than 620,000 registered securities representatives. Its responsibilities include writing and enforcing rules governing broker-dealer activities, examining firms for compliance, licensing industry participants through qualification exams (such as the Series 7 and Series 63), operating dispute resolution forums for investors, and maintaining the BrokerCheck database where investors can research the professional backgrounds of brokers and firms.
FINRA Example
- 1Before becoming a stockbroker, a candidate must pass the FINRA Series 7 exam to demonstrate competency in securities products.
- 2An investor used FINRA's BrokerCheck tool to verify their financial advisor had no disciplinary history before opening an account.
Related Terms
SEC (Securities and Exchange Commission)
The primary U.S. federal agency responsible for regulating securities markets, protecting investors, and enforcing federal securities laws.
Compliance Officer
A professional responsible for ensuring a financial institution adheres to all applicable laws, regulations, and internal policies.
Pattern Day Trader
A trader who executes four or more day trades within five business days in a margin account, triggering a $25,000 minimum equity requirement.
Accredited Investor
An individual or entity that meets SEC-defined financial thresholds, qualifying them to invest in certain unregistered securities offerings.
FDIC
Independent federal agency that insures bank deposits up to $250,000 per depositor, per institution, and supervises financial institutions for safety and soundness.
Insider Trading
The illegal practice of trading securities based on material, non-public information obtained through a position of trust or confidence.
Expand Your Financial Vocabulary
Explore 130+ financial terms with definitions, examples, and formulas
Browse Regulation & Compliance Terms