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FINRA | U.S. Financial Regulator

Andrey Mastykin
Written by:
Andrey Mastykin
Dan Blystone
Reviewed by:
Dan Blystone
Chinmay Soni
Fact-checked by:
Chinmay Soni
Updated:
June 17, 2026

Editorial Note: While we adhere to strict Editorial Integrity, this post may contain references to products from our partners. Here's an explanation for How We Make Money. None of the data and information on this webpage constitutes investment advice according to our Disclaimer.

FINRA, the Financial Industry Regulatory Authority, is a non-governmental organization that regulates securities markets and brokerage firms in the U.S. It ensures transparency and compliance in the financial industry by overseeing brokers and enforcing rules.

​​Every country’s financial system is regulated by one or more authorities, which can be government or private organizations. These include national banks and private regulators. Brokers often need to be members of self-regulatory organizations (SROs).

In this article we will describe in detail what is the FINRA (Financial Industry Regulatory Authority) and what are functions of this organization. You will also learn how to check whether a broker is licensed by FINRA

Description and functions of FINRA

FINRA (NASD until 2007) is a non-government self-regulatory organization (SRO) that supervises the OTC securities market in theory and significantly influences the exchange market in practice.

Key points about FINRA:

  • Establishment: 2007 (replacing NASD)

  • Type: non-governmental self-regulatory organization (SRO)

  • Membership: mandatory for brokers in U.S. exchange markets

  • Size: around 3,600 employees and 20 regional offices

  • Reach: about 704,000 members, including 4,000 financial organizations and 700,000 brokers

  • Activity: processes about 42 billion financial transactions daily

FINRA plays a crucial role in ensuring the transparency and compliance of brokers in the U.S. financial markets.

Here are the key functions of FINRA:

  • 1. Regulatory oversight - creates and enforces rules and regulations governing the activities of broker-dealers and their associated persons. FINRA oversees the licensing and registration of individuals and firms in the securities industry, ensuring they meet professional standards and qualifications.

  • 2. Market surveillance - monitors trading activities across various markets to detect and prevent fraudulent and manipulative practices, such as insider trading and market manipulation. Also FINRA conducts surveillance to ensure that broker-dealers comply with federal securities laws and FINRA rules.

  • 3. Arbitration and mediation - FINRA provides arbitration and mediation services to resolve disputes between investors and broker-dealers. This helps avoid lengthy and costly litigation processes.

  • 4. Education and training - FINRA offers educational resources to help investors understand the securities markets, their rights, and how to protect themselves from fraud.

  • 5. Registration and disclosure - FINRA operates BrokerCheck, a free online tool that allows investors to research the background and disciplinary history of broker-dealers and their registered representatives.

FINRA BrokerCheckFINRA BrokerCheck
To get a FINRA license, a broker must:

  • 1. Share executive information: the CEO must provide detailed information about their family's property.

  • 2. Submit business plans: this includes a business plan, development strategy, and emergency plans.

  • 3. Provide financials: a trial balance must be submitted.

  • 4. Submit additional documents: depending on the broker's activities, over 30 other documents may be required by FINRA.

A FINRA certificate shows that a broker meets the SEC's requirements and is a member of an independent self-regulatory organization (SRO). FINRA is funded by contributions from its members and fines.

How to confirm a broker’s license on the FINRA website

FINRA issues certificates that are essential for brokers to get a license from the SEC. You can search for a broker’s legal name on the FINRA website to find articles, reviews, and official releases about the company. This information is helpful for analyzing the broker before opening an account.

To find a broker’s license on the FINRA website, do the following steps:

1. On the broker’s website, find confirmation that the company is a FINRA member. If this information is not on the website, it does not mean that the broker is not registered. If you are going to trade in the U.S. market, we recommend checking every broker on the FINRA website to avoid dealing with blacklisted companies.

FINRA License InformationFINRA License Information

2. In the upper menu on the FINRA website’s homepage, select “Brokercheck”. This is a separate resource (database) of the regulator. Here you can find any information about brokers and companies whose shares are traded in the OTC market.

FINRA websiteFINRA website

3. Open the “Firm” tab. In the “Name or CRD” field, enter the broker’s full legal name. It is best to take it from the company’s website.

FINRA websiteFINRA website

4. Analyze the results.

FINRA websiteFINRA website

5. Open the broker’s page. In this case, you need the first page. The second is about clearing and the third is about investing.

FINRA websiteFINRA website

Here you will find all information about the broker such as registration with other regulators, states in which the license is valid, types of permitted services, and much more.

We advise you to familiarize yourself with brokers licensed by FINRA in the table below:

Comparison table of the best brokers licensed by FINRA
FINRA license Forex regulation Min. deposit, $ Leverage, 1: Min Spread EUR/USD, pips Trading platform Open account

Trading.com USA

Yes CFTC, NFA 50 Up to 1:400 0.9 MT5, WebTrader, Trading.com App Go to broker
Your capital is at risk.

ZForex

Yes No 10 Up to 1:30 or 1:300 (for professional accounts only; trading with such leverage forfeits ICF rights) 0.1 MT5 Go to broker
Your capital is at risk.

Plus500

Yes CySEC, FCA, ASIC, FMA, FSCA, FSA Seychelles, EFSA, MAS, DFSA, SCB 100 Up to 1:200 0.5 WebTrader, Mobile application Go to broker
80% of retail CFD accounts lose money.

OANDA

Yes FSC (BVI), ASIC, IIROC, FCA, CFTC, NFA No Up to 1:50 0.1 MetaTrader4 Go to broker
Your capital is at risk.

FOREX.com

Yes CIMA, FCA, FSA (Japan), NFA, IIROC, ASIC, CFTC 100 Up to 1:1000 0.7 FOREX.com, MT4, MT5 Study review

Pros and cons of FINRA license

FINRA is a highly respected private self-regulatory organization (SRO) in the U.S. Initially, brokers formed SROs to protect their interests while dealing with government bodies and exchanges. Over time, joining an SRO like FINRA became mandatory for brokers to operate in the U.S. stock market. While SROs are private, they are accountable to government regulators.

  • Pros
  • Cons
  • Protection for investors: unlike government regulators who primarily impose fines, FINRA focuses on protecting private clients' interests.
  • Trade security: ensures the safety of trades in the U.S. OTC market.
  • First point of contact: traders should file complaints with FINRA before approaching government regulators.
  • Costs: while brokers pay annual fees to FINRA, there is no direct evidence that these costs are passed on to traders.

Why is it important to know about FINRA

Oleg Tkachenko
Oleg Tkachenko Editor at Cryptocurrency & Blockchain Department

According to regulators’ statistics, less than 50% of U.S. securities are traded on exchanges, while the rest of securities are bought and sold through OTC Markets Group and OTC Bulletin Board. These markets are also regulated by FINRA, but, compared to exchanges, they offer softer terms of securities listing.

FINRA’s task is to assist the SEC in regulating the OTC market by carrying out judicial functions. One of the reasons to create FINRA was the need for an agency that would be entitled to hear arbitration cases in the stock market instead of in the courts, which do not have deep knowledge of financial markets.

As a financial expert, I firmly believe that working with FINRA-regulated brokers is a crucial step for ensuring safety and trust in the investment process. FINRA sets stringent standards and rules that all registered firms and their representatives must adhere to. This significantly reduces the risk of encountering fraud or unethical practices, as every company and its employees are subject to regular inspections and oversight.

FINRA-regulated brokers are required to maintain high professional and ethical standards, ensuring that your interests as an investor are always prioritized. FINRA also provides investors with access to extensive resources and tools, such as BrokerCheck, which allows you to verify the history and reputation of the brokers you plan to work with. This adds an extra layer of transparency and confidence, allowing you to make informed decisions.

Conclusion

FINRA stands as a cornerstone of trust and integrity within the U.S. financial system, diligently overseeing broker requirements and ensuring only qualified professionals secure licenses. Its robust mechanisms for addressing trader complaints foster accountability and maintain market confidence. For instance, when brokers violate industry standards, FINRA’s decisive enforcement actions serve as both remedy and deterrent. Ultimately, FINRA’s vigilant regulation not only safeguards investors but also upholds the credibility of the broader financial landscape—a testament to the indispensable role of strong oversight in modern markets.

FAQs

What types of securities markets does FINRA regulate in the United States?

FINRA regulates both the over-the-counter (OTC) securities market and has significant oversight in the exchange markets. It ensures compliance and transparency for brokers and securities transactions in these markets.

How does FINRA's arbitration and mediation process benefit investors and brokers?

FINRA's arbitration and mediation services provide a way for investors and brokers to resolve disputes efficiently, avoiding the costs and length of court proceedings. This process is handled by professionals knowledgeable about financial markets.

Why is it important for investors to check a broker’s FINRA registration status?

Verifying a broker’s FINRA registration confirms that the broker has met specific regulatory standards and is subject to regular oversight. This reduces the risk of fraud, ensures greater transparency, and offers investors more confidence in their chosen firm.

What information can be found using FINRA's BrokerCheck online tool?

BrokerCheck allows users to access a broker’s registration status, disciplinary history, affiliations with other regulators, states of license validity, and details about permitted services, enabling more informed investment decisions.

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Team that worked on the article

Andrey Mastykin
Andrey Mastykin
Head of Company Reviews and Ratings

Andrey Mastykin is an experienced author, editor, and content strategist who has been with Traders Union since 2020. As an editor, he is meticulous about fact-checking and ensuring the accuracy of all information published on the Traders Union platform.

Learn about our editorial policies
Dan Blystone
Dan Blystone
Senior English Editor

Dan Blystone began his trading career in 1998 as an arbitrage clerk on the floor of the Chicago Mercantile Exchange (CME). He later traded bond and Eurex futures at proprietary firms such as Altea Trading, gaining valuable experience in high-frequency trading and risk management.

Chinmay Soni
Chinmay Soni
Head of Fact-Checking Department

Chinmay Soni is a financial analyst with more than 5 years of experience in working with stocks, Forex, derivatives, and other assets. As a founder of a boutique research firm and an active researcher, he covers various industries and fields, providing insights backed by statistical data.

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