FINRA Regulations

(Financial Industry Regulatory Authority)

The Financial Industry Regulatory Authority (FINRA) is the largest non-governmental regulator for all securities firms doing business in the United States. All told, FINRA oversees nearly 5,100 brokerage firms, about 174,000 branch offices and more than 672,000 registered securities representatives.

Created in July 2007 through the consolidation of NASD and the member regulation, enforcement and arbitration functions of the New York Stock Exchange, FINRA is dedicated to investor protection and market integrity through effective and efficient regulation and complementary compliance and technology-based services.

FINRA touches virtually every aspect of the securities business-from registering and educating industry participants to examining securities firms; writing rules; enforcing those rules and the federal securities laws; informing and educating the investing public; providing trade reporting and other industry utilities; and administering the largest dispute resolution forum for investors and registered firms. It also performs market regulation under contract for The NASDAQ Stock Market, the American Stock Exchange, the International Securities Exchange and the Chicago Climate Exchange.

FINRA Rules

The FINRA rulebook currently consists of both NASD Rules and certain NYSE Rules that FINRA has incorporated (Incorporated NYSE Rules).

The Incorporated NYSE Rules apply solely to those members of FINRA that are also members of NYSE on or after July 30, 2007, referred to as "Dual Members." Dual Members also must comply with NASD Rules.

Firms that were members only of NASD as of July 30, 2007 remain subject only to NASD Rules, provided they do not become NYSE members in which case they would be subject to both NASD Rules and the Incorporated NYSE Rules. Similarly, a firm that becomes a new member of FINRA only (and not a member of NYSE) will be subject only to NASD Rules.

All FINRA members are subject to the FINRA By-Laws and Schedules to the By-Laws.

In interpreting the rule sets, FINRA will continue to apply the same interpretive materials that NASD and NYSE applied prior to closing. For example, FINRA will consider existing NASD interpretive letters and Notices to Members in applying NASD Rules and the NYSE Rule Interpretations Handbook and Information Memos in applying the Incorporated NYSE Rules.

For more information, please visit www.finra.org.