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What is an industry securities registration?

Mar 08, 2015 by maryanne in  |  Flag
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Hello Maryanne,

An industry securities registration is a license that registered representatives, brokers, and investment advisors must pass and maintain to sell, offer and advise on securities transactions. There are many different types of registration and licenses that allow these individuals and firms to conduct business.

The Securities and Exchange Commission (SEC) is the federal body that oversees, regulates and provides guidance to the entire securities industry. The SEC also has self regulatory organization called FINRA that is charged with administering the required securities tests and in most cases overseeing the inspection and enforcement of the securities industry. States also have some regulatory authority and each state has different laws governing their securities activity called "blue sky laws".

In general registered representatives and brokers report to FINRA and are governed by them, while registered investment advisors are regulated directly by the SEC and the advisors' local state regulator. Each professional is different but I recommend working with an registered investment advisor (RIA) as they are not compensated based on commission and must legally represent your interests first.

When considering using a professional you can look up their securities registration on FINRA 's website using a service called "Broker Check", here is the link http://brokercheck.finra.org/. This website will tell you the individual or firm's registration type and also list any complaints or financial troubles that must be disclosed about the individual or firm you are searching for.

I hope this helps!

Regards,

Curtis E. Hollowell

1 Comment   |  Flag   |  Mar 09, 2015
Charles H. Self III

Everything Curtis says is correct. To be more precise about FINRA (the Financial Industry Regulatory Authority), it is self-regulatory organization that creates and enforces rules for its members under national securities laws. But as Curtis, indicates, it is overseen by the SEC.

Flag |  Mar 11, 2015 near Appleton, WI

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