Financial Industry Regulatory Authority
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In the United States, the Financial Industry Regulatory Authority (FINRA) is a self-regulatory organization (SRO) under the Securities Exchange Act of 1934, successor to the National Association of Securities Dealers, Inc. (NASD).
FINRA is responsible for regulatory oversight of all securities firms that do business with the public; professional training, testing and licensing of registered persons; arbitration and mediation; market regulation by contract for The NASDAQ Stock Market, Inc., the American Stock Exchange LLC, and the International Securities Exchange, LLC; and industry utilities, such as Trade Reporting Facilities and other over-the-counter operations.
FINRA was formed by a consolidation of the enforcement arm of the New York Stock Exchange, NYSE Regulation, Inc., and the NASD. The merger was approved by the United States Securities and Exchange Commission (SEC) on July 26, 2007[citation needed].
The opinion of NASD is that the regulatory consolidation will "increase efficient, effective, and consistent regulation of securities firms, provide cost savings to securities firms of all sizes, and strengthen investor protection and market integrity." According to NASD, additional benefits are to "streamline the broker-dealer regulatory system, combine technologies, and permit the establishment of a single set of rules and a single set of examiners with complementary areas of expertise within a single SRO."[1]
With respect to the regulatory agency merger, SEC Chairman Chris Cox said, "The consolidation of NASD's and NYSE's member firm regulatory functions is an important step toward making our self-regulatory system not only more efficient, but more effective in protecting investors. The Commission will work closely with FINRA to eliminate unnecessarily duplicative regulation, including consolidating and strengthening what until have now been two different member rulebooks and two different enforcement systems."[2]
[edit] See Also
[edit] External links
- FINRA website
- Washington Post Article 'SEC Approves One Watchdog For Brokers Big and Small' By Carrie Johnson, Washington Post Staff Writer - Friday, July 27, 2007; D02
- "NASD Name Change Misleading to Public", Financial Planning Association press release, July 17, 2007
[edit] References
- ^ Order Approving Proposed Rule Change to Amend the By-Laws of NASD to Implement Governance and Related Changes to Accommodate the Consolidation of the Member Firm Regulatory Functions of NASD and NYSE Regulation, Inc.. U.S. Securities and Exchange Commission (2007-07-26). Retrieved on 2007-10-09.
- ^ SEC Gives Regulatory Approval for NASD and NYSE Consolidation. U.S. Securities and Exchange Commission (2007-07-26). Retrieved on 2007-10-09.
