Understanding FINRA Compliance and Keeping Your Business on Top

The Financial Industry Regulatory Authority, Inc. or FINRA is a privately owned organization working as a self-regulatory organization (SRO). It succeeded the National Association of Securities Dealers, Inc. or NASD and is often mistaken to be a government agency. However, FINRA is in no way associated to the U.S. government and is a private company that regulates the market, under contract with brokerage firms. Besides being FINRA compliance, there is also a need to be broker dealer compliance for financial firms.

What It Does?

The basic work of FINRA is to issues licenses to individuals and registers firms to the financial industry. It also writes various rules to oversee the behavior of the firms, analyze them for compliance. Moreover, the agency is governed by SEC to manage and discipline the registered members and their representatives who fail to adhere to the federal securities law or to NASD structured rules and regulations.

Being FINRA Member

Being a regulatory body, FINRA regulates its members by enforcing a number of rules, regulations, and policies that help in governing the business conducts and integrity of the members. Moreover, FINRA also provides advice to the Securities and Exchange Commission, enables binding settlement services where investors are forced to agree, and not bring their disputes and complaints against the Wall Street firms or stock brokers.

How to Keep Your Business Proceedings FINRA Compliance

Automate Communication Management

According to FINRA all the communication on social business platforms are surrounded by the backings of supervision. In order to ensure that they are working in compliance to FINRA regulations organizations need to capture as well as monitor every communication within the premises to ensure that information given to the public is based on the principles of fair dealing. It is the duty of financial institutions to supervise and forbid misleading statements, exaggerated claims, etc. from going out to the public.

No Conflicts of Interest

To remain FINRA compliance companies need to take steps to reduce or eliminate potential conflicts of interest. Moreover, they need to either prevent or monitor any electronic communication between certain groups or individuals as required by FINRA. You can contact firms to keep the tab for you and obtain complete audit trails that show when an individual or group joined a meeting and when they left.

Final Word

Compliance programs are necessary and critical for every investment adviser or company, and broker-dealer firm. The rules specified by the FINRA and SEC have to be followed by the firms to keep their head above their competitors in the market. Thus, working with broker dealer compliance or FINRA compliance will argue well for the future of the firm.

David is an online marketing executive (SEM & SEO) and likes to share information on latest technology, new products and health related issues.