Financial Firms And FINRA Compliance

admin Cloud Security Expert - CloudCodes Software
  • June 7th, 2018


If your enterprise is located in the United States, then you are covered by the Financial-Industry-Regulatory-Authority (FINRA) that is an independent regulator securities firm regulating the securities industry, which used to be called the National-Association-of-Securities-Dealers (NASD). A consolidated FINRA rulebook containing the rules and regulations is being framed by FINRA Compliance in collaboration with the Securities-Exchange-Commission (SEC) and other regulators and investors. This non-governmental, non-profit agency aims to protect investors by ensuring that there is fair and honest dealing between the brokers and the finance industry.

Need For FINRA Compliance

So, we come to the big question that – what is the need for FINRA Compliance by the financial institutions? And here is the answer in the below mentioned pointers:

  • To educate investors
  • To ensure fair play and transparency in the market dealings
  • Govern the activities of the broker-dealers with brokers by enforcing rules
  • Examine the financial institutions for the purpose of FINRA compliance

Importance of FINRA Compliance

It is vital in the US financial system that market integrity is maintained as well as the investor safeguards are enhanced. This has to be ensured at no cost to the taxpayers and this fair financial market can be achieved by enforcing the FINRA regulation.

  • The basic protection which the investors deserve is got by FINRA
  • Only qualified, tested and licensed persons can sell a security product
  • Advertisements selling security products has to be truthful and not mislead the investors
  • The security products that are sold must address the needs of the investors
  • There should be investment product disclosure before investors purchase the product

The rules and regulations of FINRA are so designed keeping the investors in mind and moreover it has the ability for the following:

  • Inspect the US equity markets accurately
  • Inform the investors through various useful tools
  • Monitor the brokerage firms successfully
  • Swiftly identify the frauds that may take place.

How Does FINRA Non-Compliance Cost A Company?

First of all, with many multiple challenges of FINRA compliance, it might not be easy for enterprises to change their work cultures immediately. It promotes a greater level of transparency in the social media and its impact on financial institutions is definitely felt. Then there are the risks of sensitive information that may be leaked through the social media practices during transactions. People often share and post crucial data that may be intentional or unintentional, but definitely not desired. When this happens, it affects the intellectual property of the institutions and the customer data gets leaked resulting in non-compliance of FINRA. Social media has the potential of disrupting the compliance measures that have to be followed and this is a cause for great concern and has to be acted upon.

How CloudCodes Helps Firms in Becoming FINRA Compliant?

All industries, be it the financial or educational institutions or even the health institutions have to follow some security concerns. FINRA/SEC is indeed for the security of the investors and FINRA compliance is must for financial firms. When the enterprises migrate their data to the cloud, their lack of oversight or planning leads to data being targeted by the way of unwanted leaks and shares, which is harmful. This can result in compliance violations and cloud services unfortunately become the vectors. Data that is saved in the cloud storage makes up for the maximum of such DLP violations and that is the direct result of unplanned security concerns. Hence, institutions need ways to not only comply with regulations, but also to prevent the sensitive data from getting leaked. CloudCodes CASB solution comes to the rescue here by enhancing the cloud security protocols of these financial institutions. CloudCodes helps enterprises achieve FINRA compliance much easily, and in the process, these solutions make their critical data safe and secure in the cloud.


Every enterprise that uses cloud computing and storage services has to follow some or the other compliance concerns and FINRA is what has to be adhered to by the financial institutions. FINRA compliance can be best achieved through CASB solutions, which also help in safeguarding and securing crucial data of these enterprises.