Investments, tenth edition

   Self-Regulation 

 In addition to government regulation, the securities market exercises considerable self-

regulation. The most important overseer in this regard is the Financial Industry Regula-

tory Authority (FINRA), which is the largest nongovernmental regulator of all securities 

firms in the United States. FINRA was formed in 2007 through the consolidation of the 

National Association of Securities Dealers (NASD) with the self-regulatory arm of the 

New York Stock Exchange. It describes its broad mission as the fostering of investor 

protection and market integrity. It examines securities firms, writes and enforces rules 

concerning trading practices, and administers a dispute-resolution forum for investors 

and registered firms. 

 In addition to being governed by exchange regulation, there is also self-regulation 

among the community of investment professionals. For example, the CFA Institute has 

developed standards of professional conduct that govern the behavior of members with the 

Chartered Financial Analysts designation, commonly referred to as CFAs. The nearby box 

presents a brief outline of those principles.