You can find all important information about the FINRA regulation on this page
FINRA (Financial Industry Regulatory Authority)
What is FINRA?
FINRA (Financial Industry Regulatory Authority) is a self-regulatory organization which regulates the U.S. securities industry. FINRA's work supports investor protection and market integrity through regulatory programs that require firms to meet certain standards when selling securities to the public, issuing new financial products and providing investment advice.
FINRA is overseen by the Securities and Exchange Commission (SEC) and is authorized by Congress to protect U.S. investors by making sure the broker-dealer industry operates fairly and honestly. We write and enforce rules governing the activities of all registered broker-dealer firms and registered brokers in the U.S
Why do you need a Financial license?
A Financial license is required to work in the financial services industry. This includes selling securities, insurance products and derivatives. In addition, you need to be licensed if you want to trade futures contracts or commodities on a futures exchange.
In order for someone to legally sell securities or provide investment advice in the United States, they must be registered with FINRA, which oversees all securities firms operating within U.S borders
A broker dealer is a financial institution that buys and sells securities on behalf of its customers. The broker dealer must be licensed by FINRA, which regulates the securities industry in the United States.
To become a broker dealer, you must:
Have an office space where you conduct business (this can be virtual)
Have at least one employee on staff who will work full time as an investment advisor or registered representative
Register with the SEC as an investment advisor if you're planning to offer advice about buying or selling investments
How to register at FINRA
FINRA is the Financial Industry Regulatory Authority, a self-regulatory organization that oversees more than 5,000 broker-dealers and banks in the U.S. It's also responsible for regulating more than 200,000 registered representatives who work at these institutions and other firms that provide financial services.
To become a registered representative with FINRA, you'll need to complete its registration process--a process that involves passing several exams on securities laws and regulations as well as completing certain educational requirements (which vary depending on your role).
You must meet the FINRA requirements.
Take a FINRA exam.
Pass the FINRA exam.
Fingerprints for FINRA
According to the 17 CFR § 240.17f-2 of the Securities Exchange Act, employees of the security industry are required to be fingerprinted. Thus, all partners, directors, officers and employees are required to be fingerprinted. This is a federal rule enforced by the SEC and adopted by each securities exchange.
§ 240.17f-2 (a) ‘(…) every member of a national securities exchange, broker, dealer, registered transfer agent and registered clearing agency shall require that each of its partners, directors, officers, and employees be fingerprinted and shall submit, or cause to be submitted, the fingerprints of such persons to the Attorney General of the United States or its designee for identification and appropriate processing.'
Fingerprints are required to be taken within 30 days of registration, and the process must be done at an approved fingerprinting facility by a qualified fingerprint technician.
Fingerprint results are generally posted in Web CRD within 24 - 36 business hours after FINRA transmits them to the FBI.
Most common fingerprint status codes:
CLER - "Clear" Indicates that no arrest record has been found for the fingerprint transaction submitted to the FBI. RAPP - "Record of Arrest and Prosecutions" aka "RAP sheet" Indicates that the FBI has returned Criminal History Record Information (CHRI). The CHRI is available to entitled users. Once FINRA has completed its review of the CHRI details that is done as a part of FINRA's disclosure review, the fingerprint status is updated to show the status of COMP (Complete). The status of COMP indicates FINRA has completed its review of the CHRI details. ILEG - "Illegible" Indicates that the FBI determined the fingerprints to be illegible. If three sets of fingerprints are submitted for an individual and returned from the FBI with an ILEG disposition, FINRA will request an FBI Name Check. (FINRA requests that the FBI conduct a search of its database based on the associated person's name (Name Check) rather than on the fingerprints submitted)
What happens if you don’t comply with FINRA?
Sanctions for wrongdoing include fines, suspensions, and, in cases of serious misconduct, bars from the brokerage industry. FINRA publishes its Sanction Guidelines so that members, associated persons and their counsel understand the types of disciplinary sanctions that may be applicable to various violations. Whenever possible, Enforcement orders firms and individuals to make restitution to harmed customers.