HookVerbWiki
Menu

Glossary

FINRA

What FINRA is, whom it regulates, and where it appears in Regulation Crowdfunding, Regulation A+, and other exempt offerings.

FINRA, the Financial Industry Regulatory Authority, is the self-regulatory organization for broker-dealers and funding portals in the United States. It is a private, non-governmental body overseen by the SEC. It writes and enforces rules for its member firms and the people who work for them, examines those firms, and runs the qualification exams registered representatives take. It was formed in 2007 from the NASD and the regulatory arm of the New York Stock Exchange.

What FINRA regulates

FINRA regulates its member firms, not issuers. A company raising money is not a FINRA member, but the intermediary running its offering usually is, so FINRA's rules reach the offering through that firm.

  • Broker-dealers must be FINRA members to do business with the public. The rules cover sales practices, supervision, communications with the public (Rule 2210), and underwriting compensation (Rule 5110).
  • Funding portals must be FINRA members under Regulation Crowdfunding. FINRA has a separate, shorter rulebook for them, the Funding Portal Rules, which include rules on communications and fair dealing.

Where it appears in an offering

  • In a Reg CF offering, the portal or broker-dealer is FINRA-supervised, and FINRA's communications rules govern what the intermediary itself publishes.
  • In a Reg A+ offering with a broker-dealer, the underwriting terms are generally filed with FINRA for review of compensation fairness before the offering proceeds.
  • FINRA's BrokerCheck is the public tool for checking whether a firm or person is registered and whether it has disciplinary history.

The SEC, not FINRA, reviews an issuer's filings such as a Form C or Form 1-A. State regulators handle their own layer; see blue-sky-laws.

Further reading

This page is general information about securities regulation, not legal advice.

Topics:glossaryregulation

Related articles

  • Broker-dealer

    What a broker-dealer is, how it registers with the SEC and FINRA, and the roles it plays in Reg CF, Reg A+, and Reg D offerings.

  • Funding portal

    What a funding portal is under Regulation Crowdfunding, how it registers with the SEC and FINRA, and what it may and may not do for an issuer.

  • Regulation Crowdfunding (Reg CF)

    Definition of Regulation Crowdfunding, the size and investor limits it carries, how an issuer may advertise a Reg CF offering, and what that means for the marketing around a raise.

  • Regulation A+ (Reg A)

    Definition of Regulation A+, the difference between Tier 1 and Tier 2, the reporting it requires, and how a qualified offering may be advertised.

  • Form C

    What Form C is, what it discloses, when it is filed, and the family of follow-on forms (C/A, C-U, C-AR, C-TR) that a Regulation Crowdfunding offering files over its life.

  • Form 1-A

    What Form 1-A is, the offering statement for a Regulation A offering, its three parts, how it is filed and reviewed, and what it means for the campaign.

Show all 9
  • Blue sky laws

    Definition of blue sky laws, the state securities laws that regulate offerings alongside federal law, and which exempt offerings are preempted from state registration.

  • Who actually regulates equity crowdfunding?

    Not one regulator but several, each with a different job. A map of the SEC, FINRA, the states, the FTC, and the ad platforms, and what each can do to a raise.

  • The forms a Reg CF offering files, from Form C to Form C-TR

    Form C opens a Reg CF raise, C/A amends it, C-U reports progress, C-AR is the annual report, C-TR ends it. Each has a deadline and a marketing consequence.

Last updated .