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Broker-Dealers, State Investment Advisers and SEC Investment Advisers

02/24/2021 – BDIA Online Examination commences April 1, 2021

The Broker-Dealer / Investment Adviser Division is continuing an annual online examination for certain registered Investment Advisers, in accordance with DFPI’s authority under California Corporations Code Section 25241, subdivision (c). This mandatory examination consists of an online examination for Investment Advisers registered with the DFPI, who have their principal place of business in another state.

The online examination for this year is scheduled to commence on April 1, 2021. If selected, the advisory firm will be notified on April 1, 2021, and required to complete and submit the online examination by May 17, 2021. The Division is structuring the exam to be conducted on this population on a four-year cycle. However, an Investment Adviser may be selected for a future examination sooner or later than the estimated four-year cycle.

To communicate the online examination, as well as any follow-up communication, the Division will use the Investment Adviser email as disclosed on the current Form ADV. The business e-mail address must be dedicated to receiving DFPI communications, and be monitored by the executive staff of your firm to ensure prompt attention is paid to communications from DFPI.

If you have any questions or inquiries, please contact the Division at [email protected]


FINRA: The organization that regulates broker-dealers and protects investors

  • The Financial Industry Regulatory Authority (FINRA) oversees US-based broker-dealer firms, registered brokers, and market dealings.
  • Brokers must be registered with FINRA in order to trade securities with the public.
  • FINRA plays a big role in market security by watching for manipulation or fraud.
  • Visit Insider's Investing Reference library for more stories.

Financial Industry Regulatory Authority (FINRA) is a private organization authorized by the US government to enforce ethical investment practices among registered brokers. FINRA is largely known for regulation and registration of brokers and brokerage firms.

In reality, FINRA casts a much wider net of responsibility. The organization also monitors daily market functions, handles customer complaints, and maintains a library of educational materials for investors. 

"Our whole mission is investor protection and market integrity," says Gerri Walsh, senior vice president of Investor Education at FINRA.

Learn more about how FINRA protects everyday investors, maintains market integrity, and why its job is so important. 

What is FINRA? 

FINRA is a self-regulatory organization (SRO) that oversees broker-dealer firms, registered brokers, and market dealings in the US. 

Empowered by the Securities and Exchange Commission (SEC), FINRA writes rules that brokers must abide by, evaluates firms' compliance with those rules, and disciplines brokers that fail to adhere. In order to trade securities with the public, brokers must be registered with FINRA, which administers a rigorous application and examination process. FINRA's online BrokerCheck tool shows whether a broker is registered with the organization.

FINRA also provides educational resources and a space for investors to file complaints about brokers. 

Understanding FINRA

FINRA exists to help the SEC regulate aspects of the securities business, namely brokers and their relationships with consumers. 

"Investing is an important part of people's hard-earned money," said Harris Kay, a managing partner with Murphy & McGonigle, a law firm specializing in securities law. "They deserve to be in a place that follows the rules."

Quick tip: Check whether your broker or brokerage firm has been following the rules with FINRA's BrokerCheck tool.

FINRA's services can be divided into a few different, but connected, duties.

  1. Regulate and oversee brokers. Once registered with FINRA, brokers must complete ongoing education requirements over the years. Brokers are subject to periodic audits, which checks whether a firm and its employees are conducting competent and honest business. If a broker is found to be noncompliant, FINRA can bring disciplinary actions against the individual and/or the firm.
  2. Maintain its BrokerCheck database on brokers and firms. You can use FINRA's BrokerCheck tool to check whether a broker is registered. BrokerCheck also provides background information on a broker or firm, including any history of disciplinary action.
  3. Receive and address customer complaints. When you have an issue with your broker or brokerage firm, you can turn to FINRA to file a complaint, which FINRA will then investigate.
  4. Provide dispute resolution services. When customer complaints evolve into legal action, FINRA provides a forum and lawyers for arbitration and mediation between customers and brokers as an alternative to going to court.
  5. Offer resources and tools for investors. FINRA has a wealth of personal finance and investing articles and calculators available to beginner and advanced investors alike. It even offers free online investing courses. You can give FINRA a toll-free call, to get help in understanding your investments whether you don't understand something in your statements or you want to know more about a hard sell your broker is trying to make. There's even a specialty helpline for senior citizens.
  6. Surveille equity markets. FINRA's technology department plays a strong role in maintaining market integrity by monitoring market transactions and orders every day. Through algorithms and artificial intelligence, FINRA looks for any patterns or signs of market manipulation or fraud. If anything is found, it gets flagged to FINRA's enforcement team, or sent to other relevant parties like the SEC or the securities exchange itself.

Quick tip: Bringing your complaint about a broker to arbitration or mediation can be a more cost-effective method than going to court. While there is a fee for the service, FINRA will provide you with a choice of arbitrators and walk you through the process.

With such a wide responsibility, FINRA is split into 11 departments, including: 

  • Board and External Relations includes Investor Education, Government Affairs, and Communications departments.
  • Enforcement takes care of FINRA'S disciplinary actions against brokers.
  • Legal oversees FINRA's rulemaking and corporate legal functions, and includes Corporate Financing and Dispute Resolution departments.
  • Member Supervision watches over and examines member firms.
  • Market Regulation Transparency Services works with the SEC and exchanges to surveille markets and examine firms to identify any potential market manipulation or fraud. This department also checks that firms remain compliant to federal securities laws. 
  • Office of Hearing Officers provides impartial adjudicators to preside over the disciplinary actions brought forward by the Enforcement Department.
  • Technology touches all aspects of technology at FINRA, including the algorithms that surveille markets.

History of FINRA

  • 1934: In response to the stock market crash of 1929, the Securities Exchange Act of 1934 established the SEC to protect against another such crisis. 
  • 1938: The National Association of Securities Dealers, Inc. (NASD) is created under the Maloney Act amendments to the Securities Exchange Act of 1934 as a private regulatory body.
  • 2007: The SEC approves the NYSE and NASD merger, creating a new agency, FINRA.


Due to the magnitude of the securities trading industry, the SEC delegated the regulation of brokers to FINRA as a matter of efficiency. By outsourcing one side of the business, the SEC can maintain better oversight.

One way to see it is that FINRA primarily deals with the human aspect of investing, focusing on the way brokers do business with the public. It ensures that brokers are up to code with its registration process and audits, and assists the public by receiving complaints and offering an arbitration forum. 

Meanwhile, the SEC focuses on the bigger picture. The SEC is able to regulate and keep an eye on securities. The SEC also verifies that companies are providing accurate and total information on their publicly available securities, whether on exchanges or over-the-counter. If someone is found in violation of securities laws, the SEC can bring action against them in federal court. 

Still, FINRA and the SEC work together in examining broker practices, sharing market surveillance information, and teaming up on enforcement actions. 

The financial takeaway

While it may seem like a background player compared to big name and trendy brokerage firms, FINRA should be investors main resource when it comes to securities and investment safety. 

FINRA is a great and important resource for anyone who participates in securities markets. It provides a ton of resources, including BrokerCheck, to help investors make smart investment decisions. It also puts brokers and firms through a rigorous registration process to ensure only qualified entities are interacting with the public when it comes to securities.

FINRA can even serve as your personal secondary gut check with its toll-free helpline whenever you need help understanding the investment world.

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Financial Industry Regulatory Authority (FINRA)

What Is the Financial Industry Regulatory Authority (FINRA)?

The Financial Industry Regulatory Authority (FINRA) is an independent, nongovernmental organization that writes and enforces the rules governing registered brokers and broker-dealer firms in the United States. Its stated mission is "to safeguard the investing public against fraud and bad practices." It is considered a self-regulatory organization.

FINRA was created as the result of the consolidation of the National Association of Securities Dealers (NASD) and the member regulation, enforcement, and arbitration operations of the New York Stock Exchange (NYSE) in 2007. The consolidation was meant to do away with overlapping or redundant regulation and reduce the cost and complexity of compliance.

Key Takeaways

  • The Financial Industry Regulatory Authority (FINRA) is an independent, nongovernmental organization that writes and enforces the rules governing registered brokers and broker-dealer firms in the United States.
  • In addition to overseeing securities firms and their brokers, FINRA administers the qualifying exams that securities professionals must pass to sell securities or supervise others who do.
  • FINRA provides resources, such as BrokerCheck, that help to protect investors.
  • The general criticism of all self-regulatory agencies, such as FINRA, is that they do just enough to maintain the public's trust.

Understanding FINRA

The Financial Industry Regulatory Authority (FINRA) is the single largest independent regulatory body for securities firms operating in the United States. FINRA oversees more than 3,500 brokerage firms, 154,000 branch offices, and nearly 625,000 registered securities representatives, as of 2019. FINRA regulates the trading of equities, corporate bonds, securities futures, and options.

The Financial Industry Regulatory Authority (FINRA) has the power to fine or ban brokers and brokerage firms that violate its rules.

FINRA has 19 offices across the United States and over 3,000 employees. In addition to overseeing securities firms and their brokers, FINRA administers the qualifying exams that securities professionals must pass to sell securities or supervise others who do. Those include, for example, the Series 7 General Securities Representative Qualification Examination and the Series 3 National Commodities Futures Examination.

In its enforcement capacity, FINRA has the power to take disciplinary actions against registered individuals or firms that violate the industry's rules. In 2019, it reported that it initiated 854 disciplinary actions, levied fines totaling $39.5 million, and ordered restitution of $27.9 million to investors. It also expelled 6 member firms and suspended another 21, while barring 348 individuals from the securities business and suspending another 415. In 2019, it referred 827 fraud and insider trading cases to the Securities and Exchange Commission (SEC) and other government agencies for prosecution.

For investors who are shopping for a broker or want to check up on their current one, FINRA maintains BrokerCheck. It is a searchable database of brokers, investment advisors, and financial advisors. BrokerCheck includes certifications, education, and any enforcement actions. BrokerCheck is based on FINRA's Central Registration Depository (CRD) database, which contains the records of individuals and firms in the securities business in the United States.

Benefits of FINRA

FINRA's main benefit is to protect investors from potential abuses and ensure ethical conduct within the financial industry. FINRA resources, such as BrokerCheck, allow investors to determine if someone claiming to be a broker is actually a member in good standing. By banning brokers that violate its rules of conduct, FINRA stops many financial crimes from taking place. Furthermore, FINRA made responsibility for these functions more clear by combining them in one organization.

The Securities and Exchange Commission approved the consolidation of the two previous organizations in July 2007. In announcing its formation, FINRA described a broad mandate that included responsibility for "rule writing, firm examination, enforcement and arbitration and mediation functions, along with all functions that were previously overseen solely by NASD, including market regulation under contract for Nasdaq, the American Stock Exchange, the International Securities Exchange, and the Chicago Climate Exchange." The American Stock Exchange was subsequently renamed NYSE American, and the Chicago Climate Exchange, a market for trading greenhouse gas emissions allowances, shut down in 2010.

Criticism of FINRA

FINRA faces much of the same type of criticism that is often applied to any self-regulatory organization. Critics, such as Senator Warren of Massachusetts and Senator Cotton of Arkansas, claim that FINRA does not do enough to protect investors. In particular, an academic study by Egan, Matvos, and Seru showed that there were issues with repeat offenders. They found that financial advisors with past histories of misconduct were several times more likely to commit offenses in the future. FINRA may have been too restrained in exercising its powers.

The general criticism of all self-regulatory agencies, such as FINRA, is that they do just enough to maintain the public's trust. In this view, self-regulatory agencies have an inherent conflict of interest. While members are interested in keeping the public's trust, that interest only goes so far. Members need to weed out the worst offenders, but they don't want the spotlight on themselves. For example, it might be possible to rank all members for integrity. Yet, that would necessarily leave about half of all members ranked as having below-average integrity. Unsurprisingly, self-regulatory agencies rarely rank members.


Dealers – FINRA Member: Firm

Amendments to the Form BD

If the information contained on the Form BD, Uniform Application for Broker-Dealer Registration, becomes inaccurate for any reason, the registrant shall file an amendment on the Form BD correcting the information within 30 days.

Amendment filings shall be made through CRD system.


Notices of termination shall be filed on the Form BDW, Uniform Request for Broker-Dealer Withdrawal.

Termination filings shall be made through the CRD system..

Annual Financial Statements

Financial statements for FINRA member dealers are NOT required to be filed with the OFR.

Renewal Fees

Renewal fees for FINRA member dealers shall be paid through the CRD system in accordance with FINRA guidelines. It is incumbent upon the registrant, not the OFR, to ensure that the renewal payment is submitted timely. The renewal fee is $200 for each firm.

Registrants should refer to Section 517.12 (11), F.S., and Rule 69W-600.001, F.A.C., for additional guidance.

Registrations for dealers expire at the end of each calendar year and must be renewed timely for the registrant to remain registered to conduct business in, to or from Florida.

Mass Transfer and Successor Registration Requirements


Broker dealer finra

Securities Broker Dealers and Securities Salespersons

Broker dealers, securities salespersons, agents of securities issuers, franchise brokers, and commodities brokers operating in Washington State are required to be licensed with the Securities Division. The Securities Division reviews applications for the qualifications of their principals, and the disciplinary history of the firm or its principals.


  • Registration Requirements for FINRA Member Firms and Salespersons
    Review of requirements for FINRA member firms and Salespersons.
  • Registration Requirements for Non-FINRA Broker Dealers and Salespersons
    Review of requirements for non-FINRA broker dealers and salespersons.
  • Canadian Broker Dealers Exemption
    Information about exemptions for Canadian broker dealers.

Forms and Testing

  • Forms
    Forms and applications for broker dealers and salespersons.
  • FINRA Testing
    How to apply for a FINRA examination.

Statutes and Rules

  • Statutes and Rules
    Laws and rules of interest to broker dealers and securities salespersons.

FAQs, Resources

  • Viatical Settlements
    Information about selling viatical settlements.
  • Life Settlement Investments
    Information about selling life settlement investments
  • Helpful Links
    Link to helpful websites for securities broker dealers and salespersons.

Information for Investors

Broker-dealers, securities salespersons, agents of securities issuers, franchise brokers, and commodities brokers operating in Washington State are required to be licensed with the Securities Division. The Securities Division reviews applications for the qualifications of their principals, and the disciplinary history of the firm or its principals.

Applications received for personal licensing are reviewed for disciplinary history and to ensure that appropriate examinations have been passed.

To check to see if a Broker-Dealer Firm, a Broker-Dealer or Broker-Dealer representative is registered, contact [email protected] or call 360-902-8815. They will be able to tell you not only if a Firm is registered to do business in Washington, but they will also be able to give you some information about past disciplinary history and other pertinent information.

You can also look up registration information for securities broker-dealers and salespersons who are members of the Financial Industry Regulatory Authority (most are) on the FINRA website. The site will also tell you if the firm or person has disciplinary history, and then you can request that the information be sent to you.

FINRA Securities Licenses: Your Ultimate Guide to the Most Important Licenses 💼🎓🧐 - ♻️ YIELD S1•E16

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