The Financial Industry Regulatory Authority FINRA is an organization that deals with the enforcement of rules governing registered brokers and broker-dealer firms in the United States.
Though FINRA is a non-governmental organization. Yet it holds the regulatory authority over the security industries and stock exchange in the US.
According to the HIPAA Journal: “FINRA is responsible for securities industry and stock market oversight and monitors the activities of more than 4,200 brokerage firms and their brokers. Up to 75 billion transactions are processed by FINRA each day.”
FINRA’s Stated Mission?
FINRA’s stated mission is “to safeguard the investing public against fraud and bad practices”
In the consolidation of the Nation Association of Securities Dealers and arbitration operation of the New York Stock Exchange.
The main goal of FINRA since its establishment is to regulate the systems of every firm adequately.
For running a series of transactions and businesses with the investing public in the United States. Both the individuals and the firms have to registered with FINRA.
Certain membership standards should fulfilled for getting FINRA broker dealer Registration Process Done.
Requirements for FINRA Registration?
The US business regulatory authorities consider it mandatory for both the firms and individuals to have FINRA broker-dealer registration for the assurance of smooth transactions in business.
If the firms violate the obligation the authorities are labile to take charge against it. That might sometimes result in a permanent ban over the business.
All the registration requirements of FINRA are observing the rule 1010 series.
FINRA Rules
1 – For operating as a registered compliance officer clearance of qualification exam is a must. The regulatory authority will decide the required test or examination.
FINRA keeping in view the position an individual is going to hold in the applicant’s business.
The individuals who want to take the qualification examination can do so. If sponsored by a current member firm or an applicant for FINRA membership.
2 – According to the FINRA Rule 1010 Series there are two registered principles. For each applicant and having one financial and one operational principle is a must.
If any applicant wishes to have an exemption from the two-principal requirement. FINRA rule 9610 requires him to submit a written request based on his purposed business.
3 – If the concerned person has already cleared the exam and is operating as a registered officer in a member firm for two years. FINRA doesn’t require him to pass the exam for continuing work in the same capacity.
4 – If an individual wants to shift to a new member firm for performing the job FINRA requires him to fill up a new member application form for the registration. In addition to it, such in the individual also has to pass additional or new exams as well.
5 – FINRA 101 series rule requires applicants to abide by strict frames governing the new member applications. It also requires the applicants to study the registration requirements in depth, as he can only operate in the firm if he fulfills all of them.
6 – No restriction by FINRA to be registered with multiple firms. The only thing it requires from the respective individual is to mention the conflicts if there are any.
Moreover
Besides this FINRA also obliges him to mention that, how he will divide and manage his time.
Further, FINRA lets the staff of the firms decide that how far the respective person meets their requirement.
This entire process carried to check that the individual performs the duty well. And the firm owners do not face any difficulty in their firm’s regulatory affairs.
Conclusion
In a nutshell, no broker-dealer individual or brokerage firm allowed to operate without authorization with Financial Industry Regulatory Authority (FINRA).
In case of any violation, the authority is liable to charge the firm or an individual as per law and in extreme cases, the authority is liable to permanently ban the firm.
So, for avoiding any sort of hassle make sure to apply for FINRA broker dealer registration in time.
