A financial services group operates two distinct business entities: a FINRA-member broker-dealer and a standalone SEC-registered investment adviser (RIA) that provides fee-based advisory services. An associated person at the firm functions both as a registered representative for the broker-dealer and an investment adviser representative (IAR) for the RIA. Which of the following statements correctly describes FINRA's regulatory jurisdiction over these entities?
- FINRA maintains regulatory authority over the broker-dealer firm and its associated securities activities, but does not directly govern or examine standalone investment adviser entities.Cevap
- BFINRA possesses statutory federal authority to independently grant, suspend, or revoke the corporate registration of standalone investment advisers without SEC involvement.
- CFINRA regulates commercial banking deposits and consumer lending operations conducted by the investment adviser's parent institution.
- DFINRA's regulatory scope applies only when associated persons act as principal dealers selling from inventory, excluding agency brokerage transactions.
Cevap
FINRA maintains regulatory jurisdiction over FINRA-member broker-dealers and their associated persons, but does not directly oversee or examine standalone investment adviser entities.
FINRA is a self-regulatory organization (SRO) empowered by federal law to regulate member broker-dealers and their associated persons. Standalone investment advisers are governed by federal (SEC) or state regulators under the Investment Advisers Act of 1940, meaning FINRA does not hold direct examination or regulatory jurisdiction over standalone RIA entities.
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SRO Authority and Regulatory Scope of FINRA vs. SEC/RIA Oversight
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