National Association of Securities Dealers (NASD)
What it is:
The National Association of Securities Dealers (NASD) was a regulatory organization that oversaw the securities industry. The Financial Industry Regulatory Authority (FINRA) superseded NASD in 2007.
How it works (Example):
In July 2007, the NASD merged with the New York Stock Exchange's regulatory body to form FINRA. FINRA is not a governmental agency, though it works closely with the Securities and Exchange Commission on oversight.
FINRA oversees more than 5,000 securities firms and almost a million registered brokers and representatives. FINRA establishes rules, performs mediation functions and works to enhance investor protections. It also administers licensing examinations, such as the Series 7 and Series 64 exams, for financial professionals.
Why it Matters:
FINRA's job is to ensure that the financial markets operate fairly, efficiently and legally. FINRA cannot put anybody in jail, but it can fine rule-breakers and even revoke licenses. The organization has offices in Washington, D.C., and New York, as well as several district offices around the United States.
