Financial Industry Regulatory Authority (FINRA)

What Is FINRA?

FINRA stands for Financial Industry Regulatory Authority. FINRA provides regulatory services to securities firms doing business with the public in the United States and its territories. 

It protects investors by making sure that brokers act ethically towards their customers. FINRA enforces rules of fair practice and monitors market activity to ensure a stable financial marketplace. 

FINRA also provides information to investors so that they can make well-informed decisions regarding investments

FINRA Departments

There are six FINRA departments:

  • FINRA Dispute Resolution
  • FINRA Broker Check
  • FINRA Arbitration and Mediation
  • FINRA National Adjudicatory Council
  • FINRA Office of General Counsel
  • FINRA Investor Education Foundation

In addition to these six, FINRA also has a FINRA Foundation that is devoted to investor education. FINRA also accommodates FINRA’s Microcap Task Force, which investigates the sales of microcap securities in FINRA market regions. 

FINRA Offices 

FINRA has offices located throughout the United States. FINRA’s headquarters is in Washington, D.C. There are a total of 19 FINRA offices located that stretch from New York City to San Francisco.

  1. Atlanta, GA
  2. Boca Raton, FL
  3. Boston, MA
  4. Chicago, IL
  5. Dallas, TX
  6. Denver, CO
  7. Jericho, NY
  8. Jersey City, NJ
  9. Kansas City, MO
  10. Los Angeles, CA
  11. New Orleans, LA
  12. New York, NY
  13. Philadelphia, PA
  14. Rockville, MD
  15. Rockville, MD
  16. Rockville, MD
  17. San Francisco, CA
  18. Washington, DC
  19. Woodbridge, NJ

For their exact locations, you can visit their link. https://www.finra.org/about/locations

FINRA Licensing and Registration

While FINRA does not require its customers to be licensed and registered, the Financial Industry Regulatory Authority sometimes oversees unregistered entities. 

FINRA licenses and regulates individuals involved in securities industries such as securities firms, brokers, broker-dealers and sales agents. 

It also registers investment companies, transfer agents and other organizations that support the financial market. However, it does not license or regulate attorneys, accountants, financial planners, real estate agents and other professionals.

Roles of FINRA

FINRA reviews and approves all FINRA members’ advertisements. 

Moreover, it reviews and approves FINRA member firm endeavors, such as:

  • Sales literature
  • Training programs
  • Customer confirmations
  • Trade confirmations
  • Options disclosure documents
  • Prospectuses for mutual funds
  • Advertising by FINRA firms in non-US markets
  • FINRA rule changes/amendments/additions to FINRA rules
  • FINRA disciplinary documents
  • FINRA notices/reports/transactions 

FINRA also has the power to fine and suspend members of FINRA for any violations.

How Does FINRA Protect Investors? 

FINRA protects investors by ensuring FINRA member firms treat their customers fairly. It makes sure that brokers act ethically towards their customers and enforces rules of fair practice and monitors market activity. 

It provides consumers with useful tools to help them make smart financial decisions. FINRA also runs FINRA Investor Education Online (FIN ED Online) as well as FINRA’s investor classes.

FINRA Broker Check is a database that allows consumers to access information on 45 million securities industry professionals. 

Lastly, FINRA offers investor education through its “FINRA Foundation for Investor Education” which promotes public understanding of FINRA rules and securities. 

Why Should I Care About FINRA? 

FINRA is the go-to source for all information FINRA related. FINRA’s investor tools allow consumers to make informed decisions about investments. 

It helps licensed market professionals understand FINRA rules by providing them with helpful resources through FIN RA Training activities and FINRA Broker  Check.

If you are an investor, they protect your interests by making sure brokers act ethically towards their customers and FINRA enforces rules of fair practice. 

FINRA is currently working on an initiative with FINRA Market Regulation Department to create a FINRA Dispute Resolution department to handle customer disputes with FINRA member firms. 

FINRA also has more than 3,500 employees in their regional offices across the country.

What Can a Person Expect From a FINRA Complaint Process?

A person can expect to be treated fairly and with respect by FINRA. FINRA will send out an acknowledgement letter within three days of FINRA receiving the FINRA complaint. 

FINRA will also notify you of FINRA’s decision about your FINRA complaint. If FINRA finds that a person has committed any violations, FINRA can take action against them and ensure they don’t break the law in the future.

FINRA Complaint Limits

You must submit your FINRA complaint within three years or FINRA will not accept your FINRA complaint. FINRA does not have a FINRA statute of limitations for FINRA complaints.

You cannot begin the process to submit a FINRA complaint unless you are registered with FINRA if you are complaining about an employee of a FINRA member firm. You must be able to show FINRA that you are an investor who is not involved in the financial industry. 

FINRA will consider FINRA complaints that come from both FINRA members and non-members, though FINRA cannot work on FINRA complaints coming from other countries. FINRA handles FINRA cases based on these three reasons:

  1. Solely its own charges
  2. Charges FINRA filed jointly with another FINRA entity
  3. Charges FINRA files on your behalf

FINRA does not handle FINRA complaints based solely on charges other FINRA entities file against you, or FINRA complaints that do not appear to require regulatory action. 

FINRA will reject FINRA complaints that do not fall into one of the three categories mentioned above.

The Bottom Line

FINRA helps protect the investing public through awareness of FINRA rules and offers guidance for investors to make informed decisions about securities. 

It also helps FINRA member firms comply with FINRA rules through FINRA training activities and FINRA Broker Check. 

FINRA handles FINRA complaints against FINRA members, non-members or groups that are not FINRA registered entities while protecting the privacy of all concerned parties.

FINRA stands for the Financial Industry Regulatory Authority.
It regulates member firms and professionals to ensure they comply with FINRA rules. FINRA also helps protect the investing public through awareness of FINRA rules, FINRA complaint tools, FINRA training activities and FINRA Broker Check.
FINRA will send FINRA acknowledgement letters within three days of FINRA receiving FINRA complaints. FINRA will also notify the FINRA complaint filer of FINRA's decision about their FINRA complaint.
It was created to inform the public about FINRA registered brokers so individuals can make informed decisions about who they choose as their securities professional. Here is a link: http://www5.finra.org/
FINRA publishes more than 1,000 FINRA rule changes each year and makes FINRA rules more accessible through FINRA.org website. FINRA also holds FINRA member firms accountable for violations of FINRA rules and federal securities law.
True Tamplin, BSc, CEPF®

About the Author
True Tamplin, BSc, CEPF®

True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.

True is a Certified Educator in Personal Finance (CEPF®), contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.

To learn more about True, visit his personal website, view his author profile on Amazon, his interview on CBS, or check out his speaker profile on the CFA Institute website.