Securities & Exchange Commission (SEC) vs. Financial Industry Regulatory Authority (FINRA):

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  • With all the financial organizations out there, knowing what they all do can be as complicated as knowing where to invest. The Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA)—formerly, the National Association of Securities Dealers (NASD)—are two of the most important regulatory bodies in the U.S. financial system, but they have very different scopes and purposes.
  • The Financial Industry Regulatory Authority (FINRA) handles the licensing and regulation of broker-dealers.
  • FINRA is a not-for-profit entity that is not part of the government. 
  • The Securities and Exchange Commission (SEC) is a government organization that is meant to protect investors and ensure the integrity of the securities market.
  • The SEC oversees FINRA and acts as the first level of appeal for actions brought by FINRA. 
  • The SEC has a wider scope as it oversees all aspects of the financial and business environment as opposed to the limited scope that FINRA has.