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. Investing

    What Does a Dealer Do?

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

    Financial Regulators: Who They Are And What They Do

    Find out how these government agencies govern the financial markets.
  3. 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” ...
  4. Investing

    Why the SEC Wants Treasuries Regulated Like Stocks

    The SEC wants to regulate one of the largest asset markets on the planet, Treasuries, and make it more transparent.
  5. Insights

    FINRA: How It Protects Investors

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

    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. 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.
  8. Financial Advisor

    Who's Looking Out For Investors?

    If your account has been mishandled, FINRA and the SEC are among several organizations that can help.
  9. Insights

    The Pitfalls Of Financial Regulation

    Regulatory actions usually have lofty intentions that end up with unintended and negative consequences.
  10. Trading

    How Forex Brokers Make Money

    Forex brokers set their prices based on commission, spread, or a combination of both. Traders have to be cautious in the thinly regulated forex market.
Frequently Asked Questions
  1. What are the Differences Among a Real Estate Agent, a broker and a Realtor?

    Learn how agents, realtors, and brokers are often considered the same, but in reality, these real estate positions have different ...
  2. What is the difference between amortization and depreciation?

    Because very few assets last forever, one of the main principles of accrual accounting requires that an asset's cost be proportionally ...
  3. Which is better, a fixed or variable rate loan?

    A variable interest rate loan is a loan in which the interest rate charged on the outstanding balance varies as market interest ...
  4. What is the 1003 mortgage application form?

    Learn about the 1003 mortgage application form, what information it requires and why this form is the industry standard for ...
Trading Center