{"id":10004,"date":"2020-11-03T15:41:40","date_gmt":"2020-11-03T20:41:40","guid":{"rendered":"http:\/\/staging-prblog.paladinregistry.com\/blog\/?p=10004"},"modified":"2025-05-08T03:00:05","modified_gmt":"2025-05-08T07:00:05","slug":"what-is-finra-and-what-is-the-role-of-finra","status":"publish","type":"post","link":"https:\/\/www.paladinregistry.com\/blog\/advisors\/what-is-finra-and-what-is-the-role-of-finra\/","title":{"rendered":"What is FINRA and What is the Role of FINRA (Financial Industry Regulatory Authority)"},"content":{"rendered":"\n<p>If you are someone who\nscrutinizes their account statements or your financial documents, you might\nhave come across the word \u2018FINRA\u2019 &#8211; probably in a very small font size. Have\nyou wondered what it stands for? How does it affect you? Why should you care?<\/p>\n\n\n\n<p>In this article, we will\nanswer all of these questions and help you understand everything you should\nknow about it.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_68_1 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-69d0734ee1502\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69d0734ee1502\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.paladinregistry.com\/blog\/advisors\/what-is-finra-and-what-is-the-role-of-finra\/#1_What_is_FINRA\" title=\"1. What is FINRA?\">1. What is FINRA?<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.paladinregistry.com\/blog\/advisors\/what-is-finra-and-what-is-the-role-of-finra\/#a_The_Inception_of_FINRA\" title=\"a. The Inception of FINRA\">a. The Inception of FINRA<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.paladinregistry.com\/blog\/advisors\/what-is-finra-and-what-is-the-role-of-finra\/#2_What_does_FINRA_do\" title=\"2. What does FINRA do\">2. What does FINRA do<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.paladinregistry.com\/blog\/advisors\/what-is-finra-and-what-is-the-role-of-finra\/#a_Member_Regulation_Department\" title=\"a. Member Regulation Department\">a. Member Regulation Department<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.paladinregistry.com\/blog\/advisors\/what-is-finra-and-what-is-the-role-of-finra\/#b_Market_Regulation_Department\" title=\"b. Market Regulation Department\">b. Market Regulation Department<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.paladinregistry.com\/blog\/advisors\/what-is-finra-and-what-is-the-role-of-finra\/#c_Enforcement_Department\" title=\"c. Enforcement Department\">c. Enforcement Department<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.paladinregistry.com\/blog\/advisors\/what-is-finra-and-what-is-the-role-of-finra\/#d_Transparency_Services_Department\" title=\"d. Transparency Services Department\">d. Transparency Services Department<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/www.paladinregistry.com\/blog\/advisors\/what-is-finra-and-what-is-the-role-of-finra\/#e_Registration_and_Disclosure_Department\" title=\"e. Registration and Disclosure Department\">e. Registration and Disclosure Department<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/www.paladinregistry.com\/blog\/advisors\/what-is-finra-and-what-is-the-role-of-finra\/#f_Dispute_Resolution_Department\" title=\"f. Dispute Resolution Department\">f. Dispute Resolution Department<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/www.paladinregistry.com\/blog\/advisors\/what-is-finra-and-what-is-the-role-of-finra\/#3_Tools_FINRA_Provides_for_Investor_Protection\" title=\"3. Tools FINRA Provides for Investor Protection\">3. Tools FINRA Provides for Investor Protection<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/www.paladinregistry.com\/blog\/advisors\/what-is-finra-and-what-is-the-role-of-finra\/#a_BrokerCheck\" title=\"a. BrokerCheck\">a. BrokerCheck<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/www.paladinregistry.com\/blog\/advisors\/what-is-finra-and-what-is-the-role-of-finra\/#b_Dispute_Resolution_Forum\" title=\"b. Dispute Resolution Forum\">b. Dispute Resolution Forum<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/www.paladinregistry.com\/blog\/advisors\/what-is-finra-and-what-is-the-role-of-finra\/#c_Securities_Helpline_for_Seniors\" title=\"c. Securities Helpline for Seniors\">c. Securities Helpline for Seniors<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/www.paladinregistry.com\/blog\/advisors\/what-is-finra-and-what-is-the-role-of-finra\/#d_Whistleblower_Facility\" title=\"d. Whistleblower Facility\">d. Whistleblower Facility<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/www.paladinregistry.com\/blog\/advisors\/what-is-finra-and-what-is-the-role-of-finra\/#e_Investor_Complaint_Centre\" title=\"e. Investor Complaint Centre\">e. Investor Complaint Centre<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/www.paladinregistry.com\/blog\/advisors\/what-is-finra-and-what-is-the-role-of-finra\/#4_Cases_Filed_Closed_by_FINRA_2019\" title=\"4. Cases Filed &amp; Closed by FINRA (2019)\">4. Cases Filed &amp; Closed by FINRA (2019)<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-17\" href=\"https:\/\/www.paladinregistry.com\/blog\/advisors\/what-is-finra-and-what-is-the-role-of-finra\/#a_Historical_Statistics_for_Cases_Filed_and_Closed\" title=\"a. Historical Statistics for Cases Filed and Closed\">a. Historical Statistics for Cases Filed and Closed<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-18\" href=\"https:\/\/www.paladinregistry.com\/blog\/advisors\/what-is-finra-and-what-is-the-role-of-finra\/#b_Leadership_at_FINRA\" title=\"b. Leadership at FINRA:\">b. Leadership at FINRA:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-19\" href=\"https:\/\/www.paladinregistry.com\/blog\/advisors\/what-is-finra-and-what-is-the-role-of-finra\/#c_FINRA_Gets_as_Much_Criticism_as_any_Self-Regulatory_Organization\" title=\"c. FINRA Gets as Much Criticism as any Self-Regulatory Organization\">c. FINRA Gets as Much Criticism as any Self-Regulatory Organization<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-20\" href=\"https:\/\/www.paladinregistry.com\/blog\/advisors\/what-is-finra-and-what-is-the-role-of-finra\/#About_Dash_Investments\" title=\"About Dash Investments\">About Dash Investments<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"1_What_is_FINRA\"><\/span><strong>1. What is FINRA<\/strong>?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Simply put, FINRA stands for the Financial Industry Regulatory Authority and it\u2019s your first line of defense against a bad experience with a securities broker. But it also does a lot more. Let us understand in detail.<\/p>\n\n\n\n<p>You\nknow that millions of transactions happen every day in our financial markets &#8211;\nstocks and mutual funds are traded, there is your 401(k) being put to work,\nengagement in derivatives, commodities, fixed income &#8211; and all of this happens\ndirectly, or through brokers or brokerage firms. Although the SEC &#8211; the\nSecurities and Exchange Commission &#8211; is the all-seeing, all-powerful body\nresponsible for creating this secure trading environment, FINRA holds an ace of\nspades in this mission to protect investors and regulate the securities industry.\n<\/p>\n\n\n\n<p>FINRA is an independent, non-governmental organization that regulates and oversees the actions of its members &#8211; the exchange market firms, brokers, brokerages, etc. It is a self-regulatory body for brokers and dealers in the United States. It oversees all securities licensing procedures and requirements for the United States. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"a_The_Inception_of_FINRA\"><\/span><strong>a. The Inception of FINRA <\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Experts estimate it took\nnearly 25 years for the markets to revive after the crash of 1929 &#8211; a dreary\nstatistic often brought to investors&#8217; attention for various reasons.\nNonetheless, the lessons learned from it are innumerable. According to\ngovernment-sponsored studies, unregulated securities markets had an upper hand\nin causing the crash. In an attempt to prevent such future meltdowns, certain\nregulatory bodies were established &#8211; the SEC and the National Association of\nSecurities Dealers (NASD) which became the first self-regulatory organization\n(SRO) in the securities industry.<\/p>\n\n\n\n<p>With technological\nadvancement, this predominantly regulatory and administrative body expanded\noperations and set up a trading platform called the National Association of\nSecurities Dealers Automated Quotations market in 1971 &#8211; what we know as the\nNASDAQ. It quickly gained popularity, especially among smaller companies. In\n1998, NASDAQ merged with AMEX &#8211; The American Stock Exchange and later further\nmerged with other exchanges\u2026a story for later.<\/p>\n\n\n\n<p>Now, NASD was not the only\nSRO, though it indeed did reign as the leading private authority in the\nsecurities market. Exchanges too had their own &#8216;corporate lobby&#8217; &#8211; like the\nNYSE Regulation, Inc., of the New York Stock Exchange (NYSE). On 26 July 2007,\nthe SEC approved the merger of NASD with NYSE Regulation, Inc. to give birth to\nFINRA. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"2_What_does_FINRA_do\"><\/span>2. <strong>What does FINRA do <\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>FINRA, as a not-for-profit\nagency, focuses on the root of problems &#8211; securities sold to investors and ones\nselling them to investors. The organization oversees about 4,250 brokerage\nfirms, 162,155 branch offices and 629,525 registered securities\nrepresentatives. It proactively monitors the products and services offered by\neach of them to safeguard investor interests. <\/p>\n\n\n\n<p>FINRA strives to ensure the\nfollowing:<\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li>Investors get a basic level of protection<\/li>\n\n\n\n<li>Anyone who sells securities products is licensed and<br>qualified<\/li>\n\n\n\n<li>Securities product advertisements are not misleading<\/li>\n\n\n\n<li>All securities sold to investors meet at least the<br>suitability standard of care<\/li>\n\n\n\n<li>Disclosure and disclaimers are accessible to investors<br>prior to purchase of securities<\/li>\n<\/ol>\n\n\n\n<p>FINRA&#8217;s mission is to safeguard the investing public against fraud and bad practices. It does this by setting up task forces to help it administer its responsibilities efficiently:<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"a_Member_Regulation_Department\"><\/span><strong>a. Member Regulation Department<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>This department is in charge of\nmonitoring its members\u2019 compliance with industry rules and regulations. It\nkeeps an eye out to detect and prevent wrongdoing in the US markets. FINRA\nmandates that anyone selling securities products or supervising those who do,\nto be qualified and licensed by FINRA.<\/p>\n\n\n\n<p>It also refers suspicious cases\nto the SEC and other appropriate agencies. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"b_Market_Regulation_Department\"><\/span><strong>b. Market Regulation Department <\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>The Market Regulation Department\nconducts examinations and investigations of trading activity in US equities,\noptions, and fixed income markets. It proactively performs surveillance\nfunctions, processing up to 75 billion transactions per day.<\/p>\n\n\n\n<p>Financial advisors need to gain\nmembership to FINRA or register with a FINRA member-firm by passing certain\nqualifying examinations administered by FINRA to be eligible to deal securities\nto investors. Some of these examinations include the Series 7 General\nSecurities Representative Qualification Examination and the Series 3 National\nCommodities Futures Examination.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"c_Enforcement_Department\"><\/span><strong>c. Enforcement Department <\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>This wing is the most powerful\nand also the most criticized of FINRA\u2019s departments. It is charged with the\nduty of investigating potential misbehavior and taking disciplinary action when\nnecessary. Disciplinary actions range from fines to barring advisors from\npractising. Remember that FINRA is backed by the SEC. A disciplinary action by\nFINRA is quite a black spot on the career of a financial advisor, which goes\ninto their permanent records. Therefore, it comes across as a deterrent to\nwrongdoing. The department also works towards obtaining restitution for harmed\ninvestors, protecting seniors and vulnerable investors, and ensuring the\nintegrity of the market. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"d_Transparency_Services_Department\"><\/span><strong>d. Transparency Services Department<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>This department focuses on\nover-the-counter securities and trading by maintaining databases and\ndisseminating real-time and historical market information. This also goes\ntowards facilitating timely information to investors to make an informed choice\nbefore investing in products recommended by brokers or advisory firms, as well\nas recording executed trades.<\/p>\n\n\n\n<p>Starting in 2020, FINRA has\nbegun a multi-year initiative dedicated to improving trade reporting and\nreference data management capabilities for member firms. FINRA has employed a\nnumber of reporting tools and systems to help the member firms comply with reporting\nrequirements and facilitate transparency in the market.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"e_Registration_and_Disclosure_Department\"><\/span><strong>e. Registration and Disclosure Department <\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>The Registration and Disclosure\ndepartment, often referred to as RAD, deals with registering and testing\nsecurities industry personnel. It is mandatory for firms and individuals to\nregister with FINRA &#8211; including salespersons, branch managers, department\nsupervisors, partners, officers and directors \u2013 basically any person engaged in\nthe securities business &#8211; before they can take a qualification exam. This\ncompiled database of registered advisors and securities dealers, their\ncertifications and disclosures are freely available on the FINRA website for\ninvestor\u2019s consumption.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"f_Dispute_Resolution_Department\"><\/span><strong>f. Dispute Resolution Department <\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>It is a rare occurrence that an investor finds himself\nin dispute with his broker or broking firm that escalates to the point that\nauthorities need to be involved. However, in case it does, you may be rest\nassured that FINRA will serve as a mediator to facilitate a fair and just\nprocess to arrive at an amicable resolution, without escalation to the courts.\nFINRA runs the largest forum specifically designed to resolve\nsecurities-related disputes between investors, securities firms and individual\nbrokers, arbitrating and mediating conflicts. This falls under the jurisdiction\nof the Dispute Resolution department of FINRA.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"3_Tools_FINRA_Provides_for_Investor_Protection\"><\/span>3. <strong>Tools FINRA Provides for Investor Protection<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Here are the resources FINRA provides for investors to be confident about participating in financial markets: <\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"a_BrokerCheck\"><\/span><strong>a. BrokerCheck<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>This is a free tool to\nresearch background information and experience of brokers, advisers and firms.\nIt helps check and verify certifications, regulatory actions if any, and\ninvestment-related licensing information, arbitration and complaints. <\/p>\n\n\n\n<p>Paladin Registry highly recommends you to verify employment history and arbitration details of your chosen financial advisor on BrokerCheck. Paladin Registry continuously strives to match you with pre-screened financial fiduciaries and validates and documents advisor qualifications and business practices.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"b_Dispute_Resolution_Forum\"><\/span>b. <strong>Dispute Resolution Forum<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>FINRA sponsors and administers the largest securities dispute resolution forum in the United States. The platform is unbiased, and though FINRA staff coordinate the dispute resolution process, they are not involved in rendering judgement. FINRA provides Mediation and Arbitration services to the disgruntled and serves as the first avenue before the SEC or the courts get involved. Do you have a complaint to raise?<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"c_Securities_Helpline_for_Seniors\"><\/span>c. <strong>Securities Helpline for Seniors<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>FINRA runs a toll-free\ncall-in service for senior investors to get assistance or raise concerns about\nbrokers or investment products.&nbsp; <\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"d_Whistleblower_Facility\"><\/span>d. <strong>Whistleblower Facility<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Given FINRA&#8217;s goals to\nachieve a clean marketplace for securities trading and bring wrongdoers to\njustice, it encourages individuals with information about potentially\nfraudulent, illegal or unethical activity to contact the Whistleblower Tip Line\nat 1-866-963-4672. Individuals outside the US can call at (646) 315-7293. Email\nFINRA: <a href=\"mailto:whistleblower@finra.org\">whistleblower\n(at) finra (dot) org<\/a> <\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"e_Investor_Complaint_Centre\"><\/span>e. <strong>Investor Complaint Centre<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>The Complaint Center provides\na forum for customers and securities personnel to alert FINRA of suspicious\nactivities or behavior instantly. If your securities advisor has mistreated\nyou, and the advisor\/firm is not willing to address your concerns, FINRA can be\nnotified. FINRA is empowered to investigate and take disciplinary action\nagainst brokers and their firms. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"4_Cases_Filed_Closed_by_FINRA_2019\"><\/span>4. <strong>Cases Filed &amp; Closed by FINRA (2019)<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"a_Historical_Statistics_for_Cases_Filed_and_Closed\"><\/span>a. <strong>Historical Statistics for Cases Filed and Closed<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1269\" height=\"590\" src=\"https:\/\/www.paladinregistry.com\/blog\/wp-content\/uploads\/2020\/10\/Historical-Statistics-for-cases-filed-and-closed.png\" alt=\"\" class=\"wp-image-10005\" srcset=\"https:\/\/www.paladinregistry.com\/blog\/wp-content\/uploads\/2020\/10\/Historical-Statistics-for-cases-filed-and-closed.png 1269w, https:\/\/www.paladinregistry.com\/blog\/wp-content\/uploads\/2020\/10\/Historical-Statistics-for-cases-filed-and-closed-300x139.png 300w, https:\/\/www.paladinregistry.com\/blog\/wp-content\/uploads\/2020\/10\/Historical-Statistics-for-cases-filed-and-closed-768x357.png 768w, https:\/\/www.paladinregistry.com\/blog\/wp-content\/uploads\/2020\/10\/Historical-Statistics-for-cases-filed-and-closed-600x279.png 600w\" sizes=\"(max-width: 1269px) 100vw, 1269px\" \/><figcaption class=\"wp-element-caption\">2020 YTD<\/figcaption><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"b_Leadership_at_FINRA\"><\/span>b. <strong>Leadership at FINRA:<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>FINRA is headed by a board of\ngovernors comprising of:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>CEO of FINRA <\/li>\n\n\n\n<li>12 Governors of<br>the public<\/li>\n\n\n\n<li>10<br>Governors\u00a0of the securities\u00a0industry<\/li>\n<\/ul>\n\n\n\n<p>The 10 Governors include:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>3 Governors for<br>large-sized firms<\/li>\n\n\n\n<li>3 Governors for<br>small-sized firms<\/li>\n\n\n\n<li>1 Governor for<br>mid-sized firms<\/li>\n\n\n\n<li>1 Floor Member<br>Governor<\/li>\n\n\n\n<li>1 Governor of<br>independent dealer\/insurance affiliates<\/li>\n\n\n\n<li>1 Investment<br>Company Affiliate<\/li>\n<\/ul>\n\n\n\n<p>The members of FINRA elect\nthe Governors of firms according to their size classification.<\/p>\n\n\n\n<p>Currently, the board of governors includes people working for Kovack Securities, Lantern Investments, Fidelity Investing, Brookings Institution, Georgetown University Law Centre, Cambridge Investment Research, and FINRA CEO Robert W. Cook.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"c_FINRA_Gets_as_Much_Criticism_as_any_Self-Regulatory_Organization\"><\/span>c. <strong>FINRA Gets as Much Criticism as any Self-Regulatory Organization<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p><strong>What you Should Take into Consideration:<\/strong><\/p>\n\n\n\n<p>Even though FINRA is\ngovernment- authorized, it is ultimately a private firm with powers to write\nits own rules but govern over other security market players, is a bitter pill\nto swallow for some. <\/p>\n\n\n\n<p>While\nFINRA is striving its best to create an environment of trust, there is,\nnevertheless, certain displeasure in the way FINRA conducts itself, given that\nthere is limited information on accountability, funding, how it spends money\ncollected as fees and fines, how it sets its regulatory agenda, how it writes\nits own rules, and how it releases information. (Note that as per law, neither\ncan the public attend its meetings nor is FINRA subject to the Freedom of\nInformation Act which allows anyone to request information from a federal\nagency). <\/p>\n\n\n\n<p>This&nbsp; government-authorized private firm wields\npower over the lives of brokers and broker-dealers. As an SRO, FINRA is\nprotected with absolute immunity against lawsuits by its own members. Experts\nfeel that the firm is largely unaccountable to the industry or to the\npublic.&nbsp; <\/p>\n\n\n\n<p>FINRA\nalso seems to be under duress from the investor community. It has been noted\nthat advisors or firms suspended or banned from operations are back in the\nmarket within a short time span. If you look at our section on Cases Filed\n&amp; Closed by FINRA, you might notice that these numbers have been constantly\ndeclining over the past few years. It has been worrisome to few that the close\nnexus with industry professionals is perhaps influencing the enforcement arm of\nFINRA. <\/p>\n\n\n\n<p>Nonetheless,\nwe cannot discount the fact that FINRA still provides valuable services and\nguidance to investors and securities professionals alike.<\/p>\n\n\n\n<p>To learn more about the most suitable tax-saving strategies for your specific financial requirements, visit&nbsp;Dash Investments&nbsp;or email me directly at&nbsp;<a href=\"mailto:dash@dashinvestments.com\"><strong>dash@dashinvestments.com<\/strong><\/a>.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"About_Dash_Investments\"><\/span><strong>About Dash Investments<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><a href=\"https:\/\/www.dashinvestments.com\/\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>Dash Investments<\/strong><\/a>&nbsp;is privately owned by&nbsp;<a href=\"https:\/\/www.paladinregistry.com\/blog\/author\/jonathan-dash-founder-cio-dash-investments\/\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>Jonathan Dash<\/strong><\/a>&nbsp;and is an independent investment advisory firm, managing private client accounts for individuals and families across America. As a Registered Investment Advisor (RIA) firm with the SEC, they are fiduciaries who put clients\u2019 interests ahead of everything else.<\/p>\n\n\n\n<p><a href=\"https:\/\/www.paladinregistry.com\/financial-advisory-firm\/woodland-hills\/california\/dash-investments\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>Dash Investments<\/strong><\/a>&nbsp;offers a full range of investment advisory and financial services, which are tailored to each client\u2019s unique needs providing institutional-caliber money management services that are based upon a solid, proven research approach. Additionally, each client receives comprehensive financial planning to ensure they are moving toward their financial goals. CEO &amp; Chief Investment Officer&nbsp;Jonathan Dash&nbsp;has been covered in major business publications such as Barron\u2019s, The Wall Street Journal, and The New York Times as a leader in the investment industry with a track record of creating value for his firm\u2019s clients.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>If you are someone who scrutinizes their account statements or your financial documents, you might have come across the word \u2018FINRA\u2019 &#8211; probably in a very small font size. Have you wondered what it stands for? How does it affect you? Why should you care? In this article, we will answer all of these questions and help you understand everything you should know about it. 1. What is FINRA? Simply<\/p>\n","protected":false},"author":125,"featured_media":10099,"comment_status":"open","ping_status":"closed","sticky":true,"template":"","format":"standard","meta":{"footnotes":""},"categories":[325,395],"tags":[],"class_list":["post-10004","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-advisors","category-investing"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v23.3 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>What is FINRA and What is the Role of Finra | Paladin Registry<\/title>\n<meta name=\"description\" content=\"The FINRA acts as a self-regulatory organization that enforces the rules governing broker dealer industry to operate with bonafide intention.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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