The securities industry is a highly regulated industry. All broker dealers are required to regulate their employees. A broker dealer must designate a principal to supervise all of the actions of the firm and its employees. The broker dealer and all of its employees are also regulated by an SRO (Self Regulatory Agency), such as FINRA or the NYSE. The SRO’s and all industry participants answer to the SEC. The SEC is the ultimate securities industry authority. Additionally, each state has adopted their own rules and regulations regarding securities transactions within their state. Violations of industry regulations may lead to fines and expulsion from the industry. Violations of state and federal laws may result in fines, expulsion from the state or industry, or a jail term. Industry participants are expected to adhere to all of the industry’s rules and regulations, as well as all state and federal laws.



Pass The Series 62 Exam





Fair Dealings With Customers

Related Articles
  1. Professionals

    What Does a Dealer Do?

    Dealers possess certain qualities that distinguish them from brokers and traders.
  2. Financial Advisor

    What Is A “Broker-Dealer” And Why Should You Care?

    For many investors, the financial services industry is a strange and mysterious place filled with a language all in its own. Terms like “alpha,” “beta” and “Sharpe-Ratio” ...
  3. Markets

    FINRA: How It Protects Investors

    Find out the history of FINRA, and how it's organized to monitor the markets and protect investors.
  4. Investing

    What's a Dealer Market?

    In a dealer market, market participants buy and sell through dealers who are designated as market makers.
  5. Markets

    Get To Know These Crucial US Options Market Regulations

    How are options regulated in the U.S and which organizations are involved in options market regulations?
  6. Financial Advisor

    Broker Or Trader: Which Career Is Right For You?

    A day in the life of a broker or trader is an exciting and varied one. Find out how to decide between these two financial professions.
  7. Investing

    Is The Series 24 Exam Hard?

    What makes the series 24 so challenging? The exam focuses very heavily on the supervision of trading and market making and the supervision of investment banking.
  8. Markets

    The Pitfalls Of Financial Regulation

    Regulatory actions usually have lofty intentions that end up with unintended and negative consequences.
  9. Markets

    Who's Looking Out For Investors?

    If your account has been mishandled, FINRA and the SEC are among several organizations that can help.
  10. Managing Wealth

    Broker Or Trader: Which Career Is Right For You?

    Both brokers and traders buy and sell securities, but there are some subtle differences between the two careers.
Trading Center