finra executive overview

8/7/2019 FINRA Executive Overview

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We’re here to protect, educateand inform investors.

Get to know us.



FINRA is the Financial Industry RegulatoryAuthority. We’re an independent, not-for-prot organization with a public mission:to protect America’s investors by making sure

the securities industry operates fairly andhonestly. We do that by writing and enforcingrules governing the activities of nearly 4,900securities rms with approximately 660,000brokers. By examining rms for compliancewith those rules. By fostering markettransparency. And by educating investors.

For 70 years, our independent regulation hasplayed a critical role in America’s nancialsystem—by enforcing high ethical standards,bringing the necessary resources and expertiseto regulation and enhancing investor safeguardsand market integrity—all at no cost to taxpayers.

FINRA continues that tradition today witha commitment to protect investors throughstrong enforcement and effective investoreducation. Because in an often unpredictablemarketplace, investors need to know someoneis looking out for them.



Every U.S. investor, every day.

Newlyweds planning to buy a home. Parents saving for a child’s college

education. Seniors depending on a secure retirement.

Every one of the 90 million American investors FINRA serves has unique

needs, but all rely on one thing: fair nancial markets. Working with

the federal government, we are every investor’s advocate—for stronger

protections and a healthier marketplace.

who we serve



2Financial Industry Regulatory Authority

Safeguard the investing public against fraud and bad practices. By qualifying and licensingbrokers, writing and enforcing rules and regulations for every single brokerage firm

and broker in the United States, and investigating and disciplining anyone who violatesthe public trust.

Put rms under a microscope. Every day, hundreds of professionally trained FINRA nancialexaminers are in the eld taking a close look at the way brokers operate, with a focus onthe greatest risks to the markets and investors. We conduct routine examinations, as wellas inquiries based on investor complaints and suspicious activity. We consult with otherregulators, determine examination priorities and conduct special “sweeps” to target issuesof immediate concern.

Enforce industry rules and federal securities laws. We foster investor condence throughvigorous enforcement. We can bring disciplinary actions against rms or individuals,

meaning we can ne them, suspend them—even expel them—from the business. Andwe frequently require rms to provide restitution to investors who have been harmed.

Register, test and educate brokers. We require all brokers to register with FINRA, pass ourqualication exams and satisfy continuing education requirements. As a result, FINRAmaintains the largest and most sophisticated online registration and reporting system inthe world—known as the Central Registration Depository. In addition, our BrokerCheck®system allows investors to check out the backgrounds of rms and brokers online:www.nra.org/brokercheck.

what we do

Empowered by the

federal government,we’re here to protect

American investors

from fraud and bad

practices.



3 Financial Industry Regulatory Authority

Work to ensure investors are not misled. We require that all broker advertisements,Web sites, sales brochures and other communications present information in a fair and

balanced manner. And certain communications—those related to mutual funds, variableproducts and options—must be led directly with FINRA. In 2008 alone, FINRA reviewedmore than 90,000 individual advertisements and communications from rms to investors.

Keep an eye on the markets. We monitor what’s happening in the U.S. stock market—by looking for suspicious trading activity in all stocks, bonds and options traded on theNASDAQ Stock Market, the International Securities Exchange and the over-the-countermarkets.

Educate and inform investors. We believe an essential component to investor protectionis investor education. We offer a range of free educational resources to help investors buildtheir nancial knowledge to better understand the markets and basic principles of saving

and investing. The FINRA Investor Education Foundation is the largest of its kind in the U.S.:www.nrafoundation.org.

Demand fairness. Today’s investors have a lot at stake. And because of that, they expectto be treated fairly. When problems between brokers and investors occur, we administerthe largest forum specically designed to resolve securities-related disputes between andamong investors, securities rms and individual brokers. We have 73 hearing locationsaround the country—including at least one in each state—and in London and Puerto Rico.

4,900 securities rms

172,000 branch ofces

660,000 registeredsecurities representatives

Every rm and broker

that sells securities

in the U.S. must be

licensed and registered

by FINRA:




Every investor deserves fundamental protections when investing in the stock market.Whether Americans are investing in a 401(k) or other thrift, savings or employee benet

plan, or in a mutual fund, ETF or variable annuity, FINRA works every day to ensure that:

anyone who sells a securities product has been ofcially tested, qualiedand licensed

every securities product advertisement used is truthful, and not misleading

any securities product promoted or sold to an investor is suitable for thatinvestor’s needs

investors receive complete disclosure about the investment product before purchase

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why our rolematters

Every day FINRA works

to ensure investorsreceive the basic

protections they

deserve—regardless of

what kind of nancial

product they buy or

who sells it to them.




Greater transparency strengthens nancial markets and empowers investors. We offeran accurate source of free information on all U.S. corporate, municipal, U.S. Treasury and

Government Agency bonds—including price and yield and other useful information andnews all in one place: www.nra.org/marketdata.

Today’s markets are growing more complex. To plan their nancial futures, investorsneed to know that the system is working effectively and efciently. And in an oftenunpredictable marketplace, investors need to know FINRA is looking out for them.

Alert investors are better investors. FINRA teaches investors how to avoid becomingvictims—making them aware of the latest investment scams and teaching them how toidentify common techniques used by unlicensed agents selling phony products. The moreinformation investors have, the safer they’ll be.

Investors need and want more knowledge about investing. Today, 100 million Americansare entering or nearing retirement, but many haven’t saved enough—and simply don’tknow enough about saving and investing. By offering unbiased information, tools andguidance to investors, FINRA makes it easier to navigate retirement and avoid commoninvesting pitfalls.

More than 90 million

Americans are invested

in the U.S. capital

markets. FINRA is

every investor’s

advocate—for stronge

protections and a

healthier marketplace.




FINRA is every investor’s advocate.

Take the case of one elderly investor that FINRA helped—a 97-year-old widow inNew Jersey whose long-time broker stole $400,000 for his personal use while she

was in the hospital. FINRA pursued the case. The broker was prosecuted and punished;

the woman got her money back.

In another case involving a broker at a large nancial rm, investors were being charged

excessive commission fees on a regular basis over a four-year period. Some faced

overcharges as high as $1 million. FINRA ned the rm, banned the broker from the

industry and customers were reimbursed.

When an 80-year-old investor was wrongly convinced by his broker to exchange his xed

annuity for a variable annuity with heavy penalties if he withdrew any of the money

within six years, FINRA took action, uncovering 23 similar cases at this one rm. The rm

was ned hundreds of thousands of dollars and FINRA helped investors get their money back.

how we makea difference




We set high ethical standards for nancial rms. One of our top priorities is toensure that rms are operating fairly and openly with investors. Firms regulated byFINRA are subjected to strict regulatory requirements, including rules for broker conductand examinations and vigorous enforcement to ensure that those rules are followed.

Our reach and impact is wide-ranging. Our work makes a real difference in the lives of investors. FINRA covers the whole “life cycle” of saving and investing. From the moment

investors begin investing to the time they retire and start drawing from their savings, theycan turn to FINRA for help.

We offer innovative tools to help investors make the right choices. Want up-to-the-minutemarket news and information? Go to FINRA’s Market Data Center. Need to check thebackground of a broker? Visit FINRA’s BrokerCheck. Wonder how all those mutual fundfees impact your investment? Use FINRA’s Fund Analyzer to nd out.

We help employees save for—and protect—their futures. In addition to promotingautomatic 401(k) enrollment for employees, we raise awareness about nancial lifeplanning, from accumulating assets before retirement to “decumulating” them inretirement—and how to make resources last a lifetime. And we work to make sure that

investors don’t get defrauded out of their life’s savings.

We alert investors about new product pitfalls. When we have a serious concern abouta new investment product, we share it with investors by publishing investor alerts.

FINRA’s BrokerCheck

system provides

background information

about rms andbrokers—including

disciplinary history—

free of charge:

www.nra.org/brokercheck



Please visit www.nra.orgto learn how FINRA protects

you and what you can doto protect yourself.

ofces17

2,800employees

Seattle

San Francisco

Los Angeles

Denver

Dallas

Kansas City

New Orleans

Chicago

Atlanta

Boca Raton

Boston

Washington, DC Rockville

PhiladelphiaLong Island

New York

Woodbridge, NJ



Investor protection. Market integrity. 1735 K Street NWWashington, DC20006-1506

www.nra.org© 2009 FINRA. All rights reserved.FINRA and other trademarks of theFinancial Industry RegulatoryAuthority, Inc. may not be usedwithout permission. The names andtrademarks of other companies, andtheir products and services are theproperty of their respective owners.09_0123.1—4/09

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