Financial Industry Regulatory Authority (FINRA) Practice Exam 2026 - Free FINRA Practice Questions and Study Guide

The primary regulatory body overseeing securities firms and brokers in the United States is FINRA, which stands for the Financial Industry Regulatory Authority. FINRA is a self-regulatory organization (SRO) that is responsible for governing the conduct of brokerage firms and their registered representatives. Its primary role includes enforcing securities industry rules, ensuring compliance with federal regulations, and protecting investors by promoting market integrity.

FINRA provides a framework for the regulation of the activities conducted by its members, including trading practices, sales conduct, and the proper handling of customer funds and securities. Its functions include administering licensing exams for brokers, conducting inspections and audits of firms, and implementing disciplinary actions when violations occur. This comprehensive oversight helps maintain investor confidence in the financial markets and ensures that securities firms operate in a fair and transparent manner.

In contrast, while other organizations like the SEC (Securities and Exchange Commission) also play a regulatory role by enforcing federal securities laws, they focus more broadly on the securities markets, including the protection of investors and the oversight of securities exchanges. The CFTC (Commodity Futures Trading Commission) regulates futures and options markets, and the FDIC (Federal Deposit Insurance Corporation) insures deposits at banks but does not directly oversee securities firms or brokers. Therefore, FINRA is