Regular investors don't always seem to know who's minding the store when it comes to supervising brokers, brokerages, and asset managers. While the Securities and Exchange Commission (SEC) gets a great deal of attention, and arguably has the most power, there are a host of other agencies and associations that play significant regulatory roles. Now one of the largest of them, FINRA, is reaching for even more power and authority. While more regulation of such an aggressive industry as financial services may seem logical to some, particularly after the abuses of recent years, FINRA's track record should give investors a moment or two of pause.
What FINRA Is
FINRA, short for Financial Industry Regulatory Authority, came into being in 2007 with the merger of the National Association of Securities Dealers (NASD) and the New York Stock Exchange's regulatory arm. Though many investors assume that FINRA is a government body, it is not – it is a private corporation that regulates financial services firms that deal with the public (in other words, brokerages and registered representatives like brokers and sell-side analysts).
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Is A Stronger FINRA A Good Thing For Investors?
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