FINRA oversees and regulates brokerage firms, stockbrokers and exchange markets. As a private, non-profit agency, it mandates how investors and securities participants can behave and interact. Should any participants be non-compliant, the agency has the authority to discipline those involved. At its center, FINRA works to protect investors and maintain market integrity.
FINRA sets the rules that brokerage firms and brokers must follow. These rules detail ethical and professional practices to prevent fraud and bad practices. FINRA regularly reviews brokerage firms and brokers to enforce these regulations. Agency examiners will even review ads and brochures to ensure they comply. Further, brokers and firm representatives must regularly report their activities to FINRA.
If brokers violate any rules, FINRA can fine, suspend or bar them from the industry. FINRA will then record any and all disciplinary actions on its website. That way, when you’re looking for a broker, you can check if your broker has a record.