Regulator FINRA


FINRA – Financial Industry Regulatory Authority. It belongs to private American institution, has a status of self-regulating organization (SRO).

The U.S. has the most developed system of regulators, and they all have an impeccable reputation among the world economic community. FINRA is one of the oldest and largest organizations in the United States (from among SRO). Its creation date – 1939 (for comparison, the European financial regulators began to appear in the 80-ies, and the peak of their occurrence started in the mid-2000s). More than 4500 thousand brokers of different sizes are under the control of the organization, 167 thousand branches, 637 thousand of holders of securities.

Despite such significant scope of activities, NFA keeps the leadership by the level of professionalism, and nifra has the same level as BaFin and CySEC.

The purpose of FINRA as the self-regulatory organization is identical to European standards – protection of rights of investors, but the methods of achieving the goal differ significantly from partners from Europe. The organization has more than 20 offices across the U.S., employing more than 3 thousand people. To react promptly to claims from investors, the organization created a huge Forum, which is divided into sites. There are about 73 of such sites in U.S. only.

For the enlightenment and education of financial market participants (especially investors), the controller in created the education Foundation in 2003, under auspices of which, the training seminars, conferences and other events are held. About 72 million dollars were invested in education by this fund for 12 years.

Leading branches of  FINRA activities:

  • licensing and qualification of brokers, investment, pension, insurance companies;
  • consulting of other financial regulators (the interesting direction that shows the experience and seriousness of the organization);
  • market regulation of individual exchanges. Since the organization is non-governmental, this regulation is carried out by mutual consent on the basis of the contract. Examples of exchanges to work with FINRA – NYSE (separate several of its divisions), NASDAQ;
  • development of regulations, procedures, work rules for the whole broker system, as well as for each single broker according to the specifics of his work;
  • monitoring compliance with Federal legislation and economic standards;
  • work with the public, media, training activities.

The declared principles (according to company website) on the basis of which realization of the goal is performed are rather lengthy: ensuring fair competition, maximum awareness of financial institutions and investors about the tools, interactions and risks, fairness in the financial markets.

At the beginning of 2016, the regulator published a warning about very high risks in binary options trading. Recently, FINRA received a lot of calls about the cases of fraud from brokers’ side offering this service on the principle “all or nothing”. Interesting case, when a third-party broker called himself as the controller and accused the trader of unauthorized trading, and required a fine. The majority of complaints are related to the fact that the broker does not want to return the Deposit to the investor under various pretexts. FINRA notified that binary options trading activities are not possible in the U.S. on any platforms, except Nadex and Cantor Exchange. And that the brokers offering foreign platforms, should be avoided.

Ways of influence to violators are classic:

  • initiation of disciplinary proceedings (under the influence of the FINRA fall financial institutions and investors themselves, if they violated the law. And if FINRA may enforce any sanctions to its members, then in respect of individuals the initiation of judicial proceedings is possible);
  • making demands to compensate the injured party loss (concerns investors probably) and to pay a fine;
  • temporary suspension of financial activities or initiation of bankruptcy.

During its work, the regulator had identified more than 7000 thousand insider transactions, more than 2,500 companies received disciplinary action. FINRA is actively cooperating with the SEC (the securities Commission with Supervisory functions, state-controlled) – in case of a criminal violation or violations of the law, the offender case is transferred to the Commission.

Obtaining FINRA license for trading on the stock exchange market is necessary – without this license, trading of securities by the broker on stock exchange is invalid. The license is issued after passing the exam, which assesses knowledge of the investment market, rules of the SEC Commission.

The official FINRA site:

Next article

Regulator CFTC

About the author



  • Becky 02.09.2016 at 18:35

    I rellay needed to find this info, thank God!

  • Kevlyn 29.08.2016 at 03:07

    WOw your card is just breath taking !!! I love this vintage look so much !!! And all the stamps around her add to to this retro look, what a beauty !!gaM!suHg 🙂