The Financial Industry Regulatory Authority (FINRA) plays a big role in keeping the U.S. stock market fair and safe. It checks that brokers and financial firms follow the rules. FINRA helps protect investors from fraud, keeps trading honest, and makes sure people get the right information. It works like a watchdog for the financial markets in the U.S.

What Is FINRA?

FINRA stands for the Financial Industry Regulatory Authority. It is a non-government, not-for-profit group that looks after broker-dealers in the United States. This means it checks if brokers are following the law and treating investors fairly. FINRA was formed in 2007 and works closely with the U.S. Securities and Exchange Commission (SEC).

Why Is FINRA Important?

FINRA is important because it makes sure that people who buy and sell stocks do it in a fair way. It checks brokers to stop cheating or scams. It also helps in keeping trust in the stock market. If there were no rules, people might be afraid to invest. FINRA helps keep the system honest so that investors feel safe and protected.

What Does FINRA Do?

FINRA checks if brokers and trading firms follow rules. It gives licenses to brokers and firms. It watches trading activities to catch bad behavior. FINRA also provides education to investors so they understand how the market works. If someone breaks the rules, FINRA can fine them or even stop them from doing business.

How Does FINRA Protect Investors?

FINRA protects investors by keeping an eye on how brokers behave. It makes sure that they are honest and give the right advice. FINRA also helps solve disputes between brokers and clients. It checks that the fees and services are clearly explained to investors. By keeping brokers in line, FINRA gives more power to small investors who may not know all the rules.

How Is FINRA Different from the SEC?

Both FINRA and SEC work to keep the stock market fair, but they have different roles. SEC is a government body. It makes the big laws and rules for the whole market. FINRA is like the police for brokers. It follows the rules made by the SEC and checks if brokers are doing things right. Think of FINRA as the one doing the everyday checks, while SEC makes the laws from above.

Why Should Indian Investors Know About FINRA?

Many Indian investors now invest in U.S. stocks through global investing platforms. Knowing about FINRA helps you understand who protects your money in the U.S. market. If you use an international broker, make sure they are registered with FINRA. This shows they are regulated and trustworthy. FINRA’s website even lets you check broker backgrounds for free.