The Financial Industry Regulatory Authority (FINRA) is the most significant regulatory body independent of security firms functioning in the USA. It looks after over 3,400 stock brokerage firms, almost 617,550 registered representatives of securities and 152, 000 branch offices as recorded in 2020. It has 19 offices across the country with nearly 3,600 employees. FINRA controls the trading of company equities, options, securities futures, and corporate bonds. It also has been authorized by the Congress party to safeguard the interests of the investors.
Besides controlling securities firms and brokers, it also administers the examinations for qualifying as securities professionals that people must pass for selling securities in the nation or for supervising those who do. The above includes the Series 3 National Commodities Futures Examination and the Series 7 General Securities Representative Qualification Examination.
Kavan Choksi Singapore – a business and finance expert, speaks on FINRA
Kavan Choksi Singapore is a reputable business and finance expert with invaluable experience in investments and economics. He offers businesses intelligent investment solutions for making the most out of their money. He also shares his views on the financial markets and holds a strong presence overseas.
Understand the advantages of FINRA for investors
The significant benefit of FINRA for investors is that they are protected from unethical conduct and potential abuses in the financial industry. The resources of FINRA allow the investor to determine whether someone claims to be a qualified broker or not. Thanks to the presence of FINRA, several financial crimes are prevented as it bans brokers who violate the rules of conduct that it has set for the securities market.
An insight into its formation in the past
The merger of the NASD and the NYSE into a single organization establishes the responsibility of FINRA to its functions and commitment to prevent financial market crimes and protect the investors in the market.
The role of the SEC in the creation of FINRA
In 2007, the SEC approved the merger of the above two organizations for the regulation of their operations by announcing the formation of FINRA. It has a comprehensive mandate that includes the tasks of responsibility for the examinations of the firm, rule writing, enforcement of rules, arbitration, and functions as a mediator. It also has to carry out other tasks that were in the past looked after by the NASD alone, and this included the regulation in the market under the contract that was created for NASDAQ, the International Securities Exchange, the American Stock Exchange, and the Chicago Climate Exchange.
Kavan Choksi Singapore states that the American Stock Exchange 2008 was taken over by The New York Stock Exchange. After five years, the NYSE was taken over by the ICE or the Intercontinental Exchange. In the above context, the Chicago Climate Exchange, which was a market for the trade of allowances for greenhouse gas emissions, had to be closed down after the ICE was bought by its parent company, the Climate Exchange Pic, in the year 2010.