FINRA, an acronym for the Financial Industry Regulatory Authority, is a non-governmental self-regulatory organization (SRO) dedicated to protecting investors and ensuring the integrity of the securities industry in the United States. Created in 2007, it operates as a not-for-profit organization authorized by Congress to regulate all brokerage firms and professionals doing business with the public.
The primary functions of FINRA include setting and enforcing industry-wide standards, facilitating fair and efficient trade practices, and promoting market transparency. It oversees and regulates more than 3,700 brokerage firms and approximately 630,000 registered securities representatives across the country.
FINRA plays a pivotal role in protecting investors by monitoring and enforcing compliance with its comprehensive rules and regulations. Among its responsibilities, it initiates investigations into potential violations, imposes sanctions and disciplinary actions against firms and individuals, and provides educational resources to help investors make informed decisions.
Additionally, FINRA operates the largest dispute resolution forum in the securities industry, handling the arbitration and mediation of disputes between investors and brokerage firms. This forum offers a fair and impartial process for resolving disputes in a timely and cost-effective manner.
Overall, FINRA's mission centers on fostering investor confidence and ensuring fair and honest practices within the U.S. securities industry through effective regulation, education, and enforcement.
