What is the purpose of the Financial Industry Regulatory Authority (FINRA)?

The Financial Industry Regulatory Authority (FINRA) serves a critical function within the financial industry by regulating brokerage firms and exchange markets. Established to protect investors and ensure fair and honest market practices, FINRA enforces rules governing trading activities, oversees the conduct of brokerage firms, and ensures compliance with federal regulations. This regulatory oversight aims to maintain fair and transparent capital markets, instilling confidence in investors regarding the integrity of the financial system.

In contrast, mutual fund management falls under the purview of investment companies and not a regulatory body. Financial planning resources are typically provided by certified financial planners and other financial advisors rather than a regulatory authority like FINRA. Additionally, banking institutions are primarily regulated by different entities, such as the Office of the Comptroller of the Currency (OCC) and the Federal Reserve, which focus on the banking sector rather than brokerage firms and markets. Thus, the correct answer highlights the specific regulatory role FINRA plays in overseeing the securities industry.