Regulatory organization FINRA

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FINRA (Financial Industry Regulatory Authority) is an independent American financial regulator, who came on as a substitute in 2007, NASD – National Association of securities dealers, created in 1939 with the filing of the U.S. Congress. The main goal of FINRA is to protect American investors, which is realized through equity during the financial markets, information and education investors, as well as the control over observance of rules of fair competition between financial markets participants. The responsibilities of FINRA include:

  • the issuance of licenses to brokerage companies;

  • development of instructions and regulations for brokers in the United States;

  • control over performance of the financial market laws and regulations Federal legislation;

  • the claims of investors and involvement in controversial issues;

  • market regulation for stock exchanges New York Stock Exchange (NYSE), International Securities Exchange, The NASDAQ Stock Market;

  • measures to prevent fraud and financial fraud;

  • creating an environment for fair and transparent trading environment;

  • consulting other regulators;

  • public awareness;

  • teaching investors the principles of investment and security.

Financial regulator FINRA has assumed the functions of NASD and stock exchange CME. Activities FINRA is controlled by the securities Commission and the markets of the USA (SEC). Participation in FINRA for stock companies and brokers is a very prestigious and responsible. To date, the license FINRA has 4 thousand brokers and over 640 thousand shareholders. To become a member of FINRA, Chairman of the company is required to be fingerprinted and the composition of the family with a full description of the property to present a detailed business plan, list of responsible persons, the company's balance sheet and monthly forecast, dogovary rent and sale, the order of the government or other companies-participants of the SRO and another 30 documents. Employees directly involved in trading operations on the financial markets undergo regular training with exams. Source of funding for non-governmental self-regulatory organizations are the contributions of its members, which are received annually in advance the prescribed amount.

Like any other activity, trade in the financial markets prone to fraud and economic crimes. To combat the financial regulator FINRA has broad authority to:

  • the disciplinary action for individual employees and for the company as a whole;

  • forcing offenders to pay damages to affected participants in the financial markets;

  • suspension of operations of the company for a certain time until its complete elimination;

  • referral of the offender to the SEC, if was discovered signs of a criminal offense (financial fraud, money laundering, tax evasion) up to imprisonment.

For reference only 2015 regulatory organization FINRA was suppressed more than 800 cases of fraud, and the total amount of penalties amounted to 192 million dollars. Thus, participation in FINRA for the broker is a symbol of reliability and trust.