Tax & regulation
What is the Financial Industry Regulatory Authority (FINRA) and what is its role in retail mediation?
By Easy Money Scanner · Educational reference · Not investment advice
The short answer
FINRA is a self-regulatory organization overseeing U.S. broker-dealers, and it operates a dispute resolution forum offering arbitration and mediation for disputes between investors and brokerage firms.
How it works
Investors with complaints against a broker can file through FINRA's arbitration process, which is generally faster and less formal than traditional court litigation, though it is typically binding.
An example
An investor disputing unauthorized trades in their account might file a FINRA arbitration claim against their broker-dealer to seek resolution and potential compensation.
Risk & limitations
Arbitration outcomes are usually final with very limited appeal rights, so investors should understand the process and may wish to consult a securities attorney beforehand. This describes U.S. federal rules only; Canadian and other non-U.S. investors are subject to different tax/regulatory regimes (e.g., CRA rules, TFSA/RRSP treatment) and should consult a local tax professional.
Examples are hypothetical, not trade recommendations. US contract and regulatory references do not automatically apply in Canada. Rules, margin requirements and broker policies can change; confirm them with the relevant authority and your broker.