Examkin

Question

Difficulty: EasyRegulatory Entities and Self-Regulatory Organizations (SROs)

A newly established broker-dealer is preparing to execute customer securities transactions. Which non-governmental entity acts as a primary self-regulatory organization (SRO) responsible for registering the firm, enforcing rules of conduct, and disciplining member firms and associated persons?

  1. Financial Industry Regulatory Authority (FINRA)Answer
  2. B
    Securities and Exchange Commission (SEC)
  3. C
    Securities Investor Protection Corporation (SIPC)
  4. D
    Depository Trust & Clearing Corporation (DTCC)

Answer

Financial Industry Regulatory Authority (FINRA)
Financial Industry Regulatory Authority (FINRA) is a non-governmental self-regulatory organization (SRO) authorized by federal law to write and enforce rules governing broker-dealer conduct, license associated persons, and examine member firms for regulatory compliance.

Step-by-Step Solution

1
Identify the organizational type requested in the scenario
The stem specifies a non-governmental self-regulatory organization (SRO) responsible for member firm registration and conduct enforcement.
Regulatory bodies are categorized as federal government agencies (SEC), SROs (FINRA, MSRB), or clearing/insurance entities (DTCC, SIPC).
2
Evaluate the regulatory role of FINRA
FINRA is the primary SRO overseeing broker-dealers and registered representatives in the United States, managing firm licensing, ethical standards, and disciplinary proceedings.
This directly matches the definition and functions described in the stem.

Key Concept

SRO Roles and FINRA Oversight Authority
Rate this question

Topics

Regulatory Entities and Self-Regulatory Organizations (SROs)

More questions from this topic